Opinion of the European Economic and Social Committee on the ‘proposal for a Regulation of the European Parliament and of the Council on administrative cooperation in the field of excise duties’ and the ‘proposal for a Directive of the European Parliament and of the Council amending Council Directive 77/799/EEC concerning mutual assistance by the competent authorities of the Member States in the field of direct taxation, certain excise duties and taxation of insurance premiums and Council Directive 92/12/EEC on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products’ (COM(2003) 797 final - 2003/0309 (COD), 2003/0310 (COD))
Date: 2004-03-31
Institutions: European Economic and Social Committee
Subjects: administrative cooperation, direct tax, exchange of information, excise duty, fraud, insurance premium, tax

C 112/64

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Official Journal of the European Union

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Opinion of the European Economic and Social Committee on the ‘proposal for a Regulation of the
European Parliament and of the Council on administrative cooperation in the field of excise
duties’ and the ‘proposal for a Directive of the European Parliament and of the Council amending
Council Directive 77/799/EEC concerning mutual assistance by the competent authorities of the
Member States in the field of direct taxation, certain excise duties and taxation of insurance
premiums and Council Directive 92/12/EEC on the general arrangements for products subject to
excise duty and on the holding, movement and monitoring of such products’

(COM(2003) 797 final - 2003/0309 (COD), 2003/0310 (COD))

(2004/C 112/19)

On 13 January 2004 the Commission decided to consult the European Economic and Social Committee,
under Article 262 of the Treaty establishing the European Community, on the above-mentioned proposals.

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 11 March 2004. The rappor-
teur was Mr Pezzini.

At its 407th plenary session (meeting of 31 March 2004) the European Economic and Social Committee
adopted the following opinion by 105 votes to one with one abstention.

1.

Introduction

various administrations and between them and the Commis-
sion.

In 1992 (1)

the scope of Directive 77/799/EEC was
1.1
extended also to excise duties in order to ensure that national
laws were applied and that fraud was effectively combated. This
extension was a response to the alarming proportions reached
by cases of fraud and to their consequences, entailing substan-
tial losses of revenue for the Member States and jeopardising
the principle of equal treatment of economic operators and the
operation of the single market.

1.2.3 On the specific point regarding more rapid and effi-
cient exchange of information, the ad hoc group's main recom-
mendation was to set up a system for computerisation of the
movements (3) and of the monitoring of all products subject to
excise duty (and hence not just tobacco and alcohol) as a
cornerstone of strengthening the mechanisms for mutual assis-
tance and administrative cooperation in the sector.

1.2 The current system cannot keep up with developments in trade

The current legal system has turned out to be too rigid
1.2.1
and inadequate to the needs of the internal market in the excise
sector, particularly in view of the accentuated internationalisa-
tion of trade and the growth in extra-national movements of
people and goods.

Excessively centralised and static cooperation has
1.2.4
meant
insufficient contacts between the local offices or
between the national anti-fraud offices, and has ultimately
constituted an obstacle to rapid and precise action as well as to
greater flexibility in monitoring.

As early as 1997, given the continuous rise in cases of
1.2.2
fraud regarding the circulation of products subject to excise
duties, an ad hoc group was set up by the European Commis-
sion with the task of analysing the situation relating to tobacco
and alcohol and of proposing solutions. In its final report (2)
this group pointed out the lack of coordination among the

1.2.5 Moreover, the monitoring has turned out to be ineffi-
cient because of the lack of precise rules to regulate certain
aspects of the cooperation itself, such as the use of ad hoc
exchanges, the presence of foreign officials at the time of the
checks, the possibility of organising multilateral checks, or the
use which can be made of the information provided by a
Member State.

(1) OJ L 76 of 23.3.1992.
(2) Report approved by the ECOFIN Council on 19.5.1998.

(3) See the EESC opinion on IDABC (e-Government services): CESE

1610/2003 of 15.12.2003.

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1.3 Need for updating

The social, economic and political context has changed
1.3.1
radically from the conditions which gave rise to the drawing-
up, the adoption and the extension of the directive on excise
duties. Similarly, the size of the internal market and the volume
of trade between Member States have changed. The exponential
growth in intra-Community transactions and better knowledge
of the various national tax systems have led to a growth in
cases of fraud, exploiting loopholes in European rules, signifi-
cant differences in taxation between Member States and,
in
general, the inefficiencies of the monitoring systems in force (1).
In this context there is a clear need to modernise, strengthen,
simplify and make more efficient the instrument for administra-
tive cooperation and exchange of information between Member
States on excise duties.

the identification and punishment of

technical resources, particularly as regards e-Government. The
EESC also takes note of the limits currently placed on the
requested cooperation in cases where it might interfere with
criminal proceedings. These limits jeopardise or indeed some-
times prevent
those
responsible for frauds in the territory of the requesting adminis-
tration. The EESC hopes that these limits can be overcome and
suggests working with a view to coordination of national crim-
inal proceedings, preferably by setting up an anti-fraud police
body at European level with greater powers than the present
one.

2.3
Chapter II (divided into five sections) regulates coopera-
tion on request, and redefines the rights and obligations of
Member States. It maps out a single legal framework which
would be more binding than the previous rules.

1.3.2
The special features of monitoring in the excise sector
make it necessary to eliminate from the scope of Directive
77/799/EEC and Directive 92/12/EEC the specific provisions
on the subject and to incorporate them together, strengthened
and simplified, in a new text, on the lines of what has already
been done with regard to VAT monitoring (2).

2.3.1 With reference to Section 1 governing the procedure
for requesting information, the EESC takes the view that the
addressee authority is still allowed too much discretion in its
response to the request for information.

2. Commission proposals

To strengthen administrative cooperation in the excise
2.1
sector, the Commission proposes a more precise legal frame-
work in the form of a regulation, and thus of an instrument
which is directly applicable in every Member State, with clear
and binding provisions. In particular, it provides for more effec-
tive and more rapid procedures in exchanges between the
administrations of the Member States and between them and
the Commission,
in order to achieve greater efficiency in
combating fraud.

2.2
Chapter I of the new regulation concentrates on general
provisions and procedures. The EESC fully endorses the types
of procedure suggested by the Commission, because these
would achieve decentralisation of cooperation and make it
possible to reduce the many bureaucratic and regulatory
barriers which too often hinder the fight against fraud.

2.2.1
The results of these changes should be more rapid
exchanges, better motivated officials and more effective use of

(1) See the EESC opinion on the Proposal for a Directive of the Euro-
pean Parliament and of the Council amending Council Directive
77/799/EEC concerning mutual assistance by the competent autho-
rities of the Member States in the field of direct and indirect taxa-
tion.

(2) Council Regulation (EC) No. 1798/2003 of 7 October 2003 on
administrative cooperation in the field of value added tax and
repealing Regulation (EEC) No. 218/92 (OJ L 264 of 15.10.2003,
p. 1).

2.3.2
Section 2 lays down the time limit for providing infor-
mation in response to such a request, while Section 3 governs
the presence of officials from the tax authorities of other
Member States in the administrative offices and at administra-
tive enquiries. Such officials can take action within limits, and
only subject to previous agreements between the two national
authorities concerned.

2.3.3 With regard to Section 3, the EESC would point out
how, here too, the legislation of the addressee authority, parti-
cularly in criminal matters, could in effect vitiate cooperation,
even if the latter is assisted with specific funding (3).

2.3.4
listing precisely the rights and obligations of
concerned and the procedures to be followed.

Section 4 regulates the use of simultaneous controls,
the parties

2.3.5 Here, too, the EESC feels that too much discretion is
left to the addressee authority in taking action on simultaneous
controls.

2.3.6
administrative notification.

Section 5 regulates

the procedure for

requesting

(3) Decision No. 2235/2002/EC of the European Parliament and of the
Council of 3 December 2002 adopting a Community programme to
improve the operation of taxation systems in the internal market
(Fiscalis programme 2003-2007), OJ L 341 of 17.12.2002, page 1.

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2.3.7
The EESC endorses Section 5 and in particular the obli-
gation to use only the single form for the notification proce-
dure.

provisions on mutual assistance, if it is a matter of suspected
fraud.

Chapter III lays down the rules for exchange of informa-

2.4
tion without prior request.

2.9
Chapter VIII concerns the final provisions, among which
it is stressed in particular that to implement the present regu-
lation the regulatory committee procedure mentioned above
must be used.

2.4.1
The Commission proposal establishes a flexible, effec-
tive framework for increasing exchanges between national
authorities. However, it is confined to specifying the situations
in which such exchanges should take place, while leaving other
important aspects to the regulatory committee procedure (1).

Chapter

2.5
IV deals with the principles governing the
storage and exchange of information specific to intra-Com-
munity transactions.

2.5.1
The EESC endorses the setting up and/or updating of
computerised cooperation systems. The use of modern infor-
mation and communication technology is a decisive step
towards achieving greater and more efficient control.

Chapter V governs relations between the national autho-
2.6
rities and the Commission. The latter has no operational role,
but only tasks of coordination and stimulus as the guarantor of
the proper functioning of administrative cooperation.

2.6.1
The EESC acknowledges the fundamental importance
and the completeness of the means provided by the regulation
to oblige national authorities to provide precise information to
the Commission.

2.7
Chapter VI deals with relations with non-EU countries,
providing a legal basis for communicating information from a
non-EU country to any Member State under a bilateral agree-
ment.

2.7.1
information exchange to non-EU countries.

The EESC underlines the importance of extending

2.8
Chapter VII
exchange of information.

lays down the conditions governing the

The EESC has no special comment to make on this
2.9.1
part, except
the proposed five-year frequency for the
presentation of the report on the way the regulation is applied
seems to be more suitable than the present two-year frequency.

that

2.10 Proposal to amend Directives 77/799/EEC and 92/12/EEC

completely

2.10.1
The parts concerning excise duties – which would be
updated and covered by the proposed regulation – would now
scope of Directive
be
77/799/EEC. The same applies to the articles on excise duties
in Directive 92/12/EEC, which would now be incorporated, as
amended, in the same proposed regulation.

from the

excluded

3. Conclusions

3.1
The EESC appreciates the new rules on cooperation
between Member States proposed by the Commission, and
agrees with the need to update and strengthen the system of
information exchange between Member States in order to
combat fraud relating to excise duties. It also notes that the
growth in the size and operation of
the internal market,
together with the increase in taxable persons operating in more
than one Member State, calls for greater efforts at cooperation
between national administrations.

3.1.1
This is extremely topical when one considers that the
EESC has repeatedly stressed the need to strengthen and
improve cooperation between the Member States, bearing in
inability to make use of existing cooperation
mind their
mechanisms (2) for preventing fraud.

2.8.1
It is emphasised that some of the limits laid down in
Chapter VII are due to national practices or laws which unfor-
tunately reduce the efficiency of the system, to the extent that
in some cases the Member States avoid making use of the

(1) Articles 5, 7 and 8 of the Council Decision of 28 June 1999 laying
implementing powers

down the procedures for the exercise of
conferred on the Commission (1999/468/EC).

3.2
The Committee, while it acknowledges the specific char-
acteristics of each sector, emphasises that an effective system of
checks and mutual assistance between the competent authori-
ties of the Member States cannot operate without greater, more
constant coordination between the existing monitoring systems
for direct taxation, indirect taxation and excise duties.

(2) EESC opinion: OJ C 80 of 3.4.2002, page 76.

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uncoupled from the current national procedures and to be
applied gradually.

The Committee takes this opportunity to criticise the
3.6
limitations arising from the unanimity principle, which at
present governs most Community decisions on tax law, and
reiterates the need to replace it with the qualified majority prin-
ciple when it is a matter of taxes which influence the operation
of the internal market or cause distortions of competition.

3.7
It is curious that reference is often made in general to
the constitutional principles of fairness in taxation, in relation
to the potential distortions of the European internal market,
while in practice differences and privileges arising from
national laws and procedures, and which affect other Member
States, are accepted.

3.8
Taking account of national procedures in force and of
the political reluctance to change these structures radically, the
EESC accepts the proposed amendments as a point of conver-
gence and as a further step, albeit insufficient, towards moder-
nising cooperation between Member States. For example,
it
welcomes giving equal
legal force to information exchanged
electronically and information exchanged on paper. It also calls
on the relevant authorities of the Member States to react in
good time to cooperation requests from other administrations,
without subordinating such practices to purely national enqui-
ries. In this context it points out that the technology of moni-
toring and exchange instruments must be adapted to the most
highly developed forms of fraud and evasion, which themselves
make use of the most modern technology.

3.9
The EESC suggests that it is advisable to give the Euro-
pean Commission greater operational and investigative powers,
for example through the OLAF which could take on broader
supranational powers of monitoring, investigation and action.

The President

of the European Economic and Social Committee

Roger BRIESCH

The Committee reiterates its view (1) that the existing
3.3
differences between the Member States in administrative proce-
dures jeopardise the effectiveness of checks, lengthen the time
taken for them and represent a significant obstacle to the
operation of the internal market.

3.3.1
In the light of the above, absolute priority should be
given to any measure intended to introduce more common
rules covering every Community citizen.

3.3.2
In this context the 1998 report to the European Court
of Auditors (2) pointed out that the fight against fraud lacked a
precise strategy. Indeed, it noted a contradiction between the
existence of a single market for fraud and the absence of a
single market for applying the law. In terms of VAT alone, the
Court estimated the extent of fraud (3) at EUR 70 billion, corre-
sponding to 21 % of the total revenue of the Member States.

3.4 Once again the benefits which would flow from more
effective operation of the single market, and in the case in
point from procedures likely to detect and combat fraud and
tax evasion, are being limited by the wish to safeguard national
interests. As already pointed out by the EESC (4), administrative
cooperation and prevention of fraud must go hand in hand
with modernisation and simplification of tax systems. This is all
the more true in an enlarged Union, in which harmonisation
takes on even greater importance. There is no doubt that many
fraudulent practices are directly related to the differences —
sometimes significant — which exist between excise rates
applied in the different Member States.

It would be desirable to combine supranational

legal
3.5
instruments such as that of
the European company with
suitable taxation instruments and related procedures for moni-
toring and information exchange. In other words, one could
and monitoring system,
exchange
envisage

‘European’

a

Brussels, 31 March 2004.

(1) EESC Opinion on the Proposal for a Council Directive amending

Directive 77/388/EEC – OJ C 19 of 21.1.1998, page 56.

(2) OJ C 349 of 17.11.1998, page 15.
(3) Ibidem.
(4) EESC Opinion on the Proposal for a Council Regulation amending
Council Regulation (EEC) No. 218/92 – OJ C 116 of 20.4.2001,
page 59.