Opinion of the Economic and Social Committee on the "Proposal for a Decision of the European Parliament and of the Council adopting a Community programme to improve the operation of taxation systems in the internal market (Fiscalis 2007 programme)" (COM(2002) 10 final — 2002/0015 (COD))
Date: 2002-07-17
Institutions: European Economic and Social Committee
Subjects: EU programme, action programme, budget, direct tax, fiscal policy, tax system

7.10.2002

EN

Official Journal of the European Communities

C 241/81

Opinion of the Economic and Social Committee on the ‘Proposal for a Decision of the European
Parliament and of the Council adopting a Community programme to improve the operation of
taxation systems in the internal market (Fiscalis 2007 programme)’

(COM(2002) 10 final — 2002/0015 (COD))

(2002/C 241/15)

On 31 January 2002, the Council decided to consult the Economic and Social Committee, under
Article 262 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Economic and Monetary Union and Economic and Social Cohesion, which was
responsible for preparing the Committee’s work on the subject, adopted its opinion on 25 June 2002.
The rapporteur was Mr Bento Gonçalves.

At its 392nd Plenary Session of 17 and 18 July 2002 (meeting of 17 July 2002), the Economic and Social
Committee adopted the following opinion by 124 votes in favour and one against, with one abstention.

1.

Introduction

1.1.
The draft Decision is basically an extension of the
Fiscalis programme adopted by the European Parliament and
the Council in 1998 (1) and intended to run from 1998 to
2002.

An example of this is the explicit reference in the
1.3.1.
field of VAT to support for the European Union VAT strategy
as an objective of Fiscalis 2007.

Even in the field of direct taxation, where there is
1.3.2.
little history of Community measures to harmonise and
coordinate policies, the aim for Fiscalis 2 is to ‘raise awareness
of Community policies’.

The interim evaluation (2) of the first three years of
1.1.1.
the programme allowed the Commission to conclude that the
impact had been encouraging, thus giving good grounds for
its continuation.

2. Gist of the draft Decision

The draft Decision establishes the Fiscalis 2007 pro-
the Fiscalis

1.2.
gramme, which is largely a continuation of
programme adopted in 1998.

The draft Decision on Fiscalis 2007 is similar in

2.1.
structure to the first Fiscalis adopted in 1998.

2.1.1.

It covers the four basic elements of the programme:

1.2.1.
However, some significant modifications are pro-
posed, most notably the introduction into the programme
of cooperation measures between Member States, their tax
administrations and officials in the field of direct taxation,
which was not included in the earlier Fiscalis.

— scope and objectives;

— programme activities;

— financial provisions;

The objectives of Fiscalis 2007 are also more directly
1.3.
linked to the concrete objectives of fiscal policies set for
different types of Community-level taxes.

The inclusion of direct taxation is an innovation in the

2.2.
scope defined for Fiscalis 2007.

— follow-up and monitoring provisions.

( 1) Decision No 888/98/EC of the European Parliament and of the
Council, of 30 March 1998, establishing a programme of
Community action to ameliorate the indirect taxation systems of
the internal market (Fiscalis programme).

( 2) SEC(2001) 1328.

2.3.
The objectives of Fiscalis 2007 — set out in Article 3
of the draft Decision — are structured with greater precision
and linked to specific fiscal policies.

The activities covered by Fiscalis 2007 are identical to

2.4.
those under Fiscalis, which ran from 1998 to 2002.

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Official Journal of the European Communities

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2.5.
On the question of financing, the Commission provides
for an increase in the overall funding over five years from EUR
40 million to 56 million, on the grounds not only of the
broader scope of the programme, with the inclusion of direct
taxation, but also of the need to increase and enhance the level
of involvement in the programme of the candidate countries.

2.6.
For follow-up and monitoring, Article 13 of the draft
Decision provides for the creation of a Fiscalis Committee to
perform the functions of the former Standing Committee on
Administrative Cooperation in the field of Indirect Taxation.

3. Specific comments

3.1.
In its assessment of the draft Decision establishing the
Fiscalis 2007 programme, the Economic and Social Committee
would draw attention to its previous opinion on Fiscalis drawn
up in 1997 (1), which endorsed the initiative overall.

3.2.
The Committee would emphasise the need for this
kind of cooperation programme between the Member States,
especially in the field of taxation, where national tax adminis-
trations face new problems and challenges every day, particu-
larly in the growing area of electronic commerce.

Fiscalis 2007 should not be seen merely as a training

3.3.
programme in the field of taxation.

3.3.1. Without detracting from the importance of the
training component — training activities, seminars, exchanges
of officials — Fiscalis 2007 should be seen mainly as a
cooperation programme between Member States and candi-
date countries which will produce results in the fight against
tax evasion and fraud, at both Community and national level,
so as to ensure uniform application of Community law,
guaranteeing sufficient financial resources for both the Member
States and the European Union to meet the political commit-
ments they have made to their citizens.

A positive development, which the Committee would
3.4.
highlight, is the broadening of the scope of Fiscalis 2007 to

include direct taxation. It hopes that the programme might
help to overcome the difficulties the Community has experi-
enced in coordinating fiscal policy in the field of direct
taxation.

Importantly as regards VAT, Fiscalis 2007 can be
3.5.
another instrument to facilitate adoption of definitive VAT
rules based on taxation in the country of origin, in line with
the positions adopted by the Committee in this respect.

3.6.
The Committee is convinced that effectiveness and
success in pursuing the objectives of Fiscalis 2007 will also
depend on there being a programme with similar objectives in
the field of customs duties (2), and on the possibility of
combining specific and complementary actions under the two
programmes.

3.6.1.
It is also important in this field to ensure that
customs controls are effective in making sure that the physical
quantities of goods entering the Community area are put
through the tax system properly.

3.7.
Given the importance of the objectives of the Fiscalis
2007 programme for the success of the EU’s entire fiscal
policy, the Committee feels obliged to recommend that, with
enlargement imminent, the candidate countries should be
strongly encouraged to take part in the programme, an aim
which will be easier to achieve if the costs involved in taking
part are not particularly substantial.

3.8.
Lastly, the Committee feels that, in its interim and final
assessment of Fiscalis 2007, the Commission should try to
quantify the impact of programme measures, in addition to
presenting a qualitative assessment, specifically in terms of
results in combating tax evasion and fraud, as this would
certainly serve to motivate and increase the commitment of
the participating States.

4. Conclusions

4.1. Without prejudice to the comments and recommen-
dations made in the previous section, the Committee congratu-
lates the Commission on its proposal to extend the first Fiscalis
programme, adapting it to the new circumstances in the world

( 1) OJ C 19, 21.1.1998, p. 48.

(2) Already proposed in COM(2002) 26 final

‘Customs 2007’,
currently being examined by the European Parliament and the
ESC (2002/0029 COD).

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Official Journal of the European Communities

C 241/83

of economics and taxation, devoting particular attention to
the candidate countries and — as the Committee had cause to
recommend in 1997 (1) — broadening Fiscalis 2007 to take in
the important area of direct taxation.

4.2.
The success of this objective will depend on how
effective customs controls are able to be, as mentioned in
point 3.6.1 of this opinion.

( 1) OJ C 19, 21.1.1998, p. 48.

Brussels, 17 July 2002.

4.3.
The Council and the Commission should introduce the
long-promised definitive VAT rules, based on the country of
origin, as the Committee has been proposing.

The President

of the Economic and Social Committee

Göke FRERICHS

Opinion of the Economic and Social Committee on the ‘Proposal for a Council Directive
amending Directive 77/388/EEC as regards the special scheme for travel agents’

(COM(2002) 64 final — 2002/0041 (CNS))

(2002/C 241/16)

On 6 March 2002, the Council decided to consult the Economic and Social Committee, under Article 262
of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Economic and Monetary Union and Economic and Social Cohesion, which was
responsible for preparing the Committee’s work on the subject, adopted its opinion on 25 June 2002.
The rapporteur was Mr Walker.

At its 392nd Plenary Session, held on 17 and 18 July 2002 (meeting of 17 July 2002), the Economic and
Social Committee adopted the following opinion by 117 votes to one with six abstentions.

1.

Introduction

1.1.
In 1977, when the Sixth VAT Directive was adopted, a
special scheme was included for travel agents and tour
operators, the Travel Operators Margin Scheme (TOMS). This
special scheme was created because of the specific nature of
the business. It was thought that the application of the normal
rules on place of taxation, taxable amount and deduction of
input tax would, by reason of the complexity of services and
the multiplicity of places in which they are provided, entail
practical difficulties for those undertakings, of such a nature as
to obstruct their operations. In order to adapt the applicable
rules to the specific nature of such operations, the Community
legislature set up a special VAT scheme in Article 26 of the
Sixth Directive.

puts them together in a package and sells them to the traveller,
in his own name and for his own account, the provisions of
TOMS ensure that the travel agent avoids the requirement for
multiple registrations for VAT purposes in the different
Member States whence the services are supplied.

1.1.1.1.
Conversely, where the travel agent purchases ser-
vices from other suppliers as an agent for his customer and
not for his own account (i.e. the customer is directly and solely
responsible for payment of the charges incurred), the VAT
liability devolves upon the customer and TOMS does not
apply. Arrangements of this kind are outside the scope of the
proposed Directive and of this opinion.

The first objective of TOMS was to simplify the
1.1.1.
application of the Community VAT rules for these supplies.
When the travel agent purchases services from other suppliers,

The effect of the scheme is to simplify the com-
1.1.1.2.
pliance requirements for the tour operators. Where TOMS is
not applicable, a travel agent located in Member State A who