Report from the Commission to the Council and the European Parliament on the use of the provisions on mutual assistance for the recovery of claims relating to certain levies, duties, taxes and other measures
Date: 2006-02-08
Institutions: European Commission
Subjects: EAGGF Guarantee Section, administrative cooperation, application of EU law, claim, disclosure of information, distribution of EU funding, exchange of information, redemption

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 8.2.2006 
COM(2006) 43 final 

REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN 
PARLIAMENT 

on the use of the provisions on mutual assistance for the recovery of claims relating to 
certain levies, duties, taxes and other measures 

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CONTENTS 

1. 

2. 

3. 

3.1. 

3.2. 

4. 

4.1. 

4.2. 

4.3. 

5. 

5.1. 

5.2. 

6. 

6.1. 

6.2. 

Introduction .................................................................................................................. 3 

Background .................................................................................................................. 3 

Introductory remarks on transposal and application of the directives ......................... 3 

Failure to comply with the deadline for transposal...................................................... 3 

Application of the directives in relations with the new Member States ...................... 4 

Analysis of the use of mutual assistance measures in 2003-2004 ............................... 4 

Introductory remarks.................................................................................................... 4 

Statistics ....................................................................................................................... 5 

Evaluation of the statistics ........................................................................................... 6 

Community initiatives to bolster mutual assistance for recovery ................................ 8 

Ongoing support by Member States in the application of mutual assistance .............. 8 

New initiatives to improve mutual assistance initiatives ............................................. 8 

Conclusions and recommandations.............................................................................. 9 

Conclusions .................................................................................................................. 9 

Recommandations ........................................................................................................ 9 

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1. 

INTRODUCTION 

For  the  national  tax  authorities,  whose  enforcement  powers  are  confined  to  the  territory  of 
their  own  Member  State,  increased  mobility  of  persons,  goods,  services  and  capital 
throughout the territory of the EU can cause claims recovery problems, in particular in cases 
of tax evasion. 

In these circumstances, mutual assistance by the national authorities on tax claims recovery, 
as governed by Council Directive 76/308/EEC of 15 March 19761 and Commission Directive 
2002/94/EC  of  9  December  2002,2  has  proved  a  useful  and  even  essential  instrument. 
Detecting fraud is one thing: taxes and levies due also have to be recovered and the fact that 
debtors  may  have  settled  in  another  Member  State  or  moved  their  assets  there  should  not 
constitute an insuperable obstacle to the recovery of the tax claims. 

This  report  summarises  the  results  of  mutual  assistance  for  recovery  provided  in  2003  and 
2004 under this new legislation. 

2. 

BACKGROUND 

Pursuant  to  Article  25,  second  subparagraph,  of  Directive  76/308/EEC,  as  amended  by 
Article 1(13) of Council Directive 2001/44/EC of 15 June 2001,3 the Commission is required 
to produce a regular report on the use of the provisions on mutual assistance for recovery of 
claims relating to certain levies, duties, taxes and other measures that Member States adopted 
by  transposing  Directive  76/308/EEC  and  on  the  results  obtained  thanks  to  this  mutual 
assistance. To enable the Commission to write these reports, each Member State is required to 
inform it each year of the number of requests for information, notification and recovery sent 
and received, the amount of the claims and the amounts recovered. Since Member States had 
to  transpose  Directive  2001/44/EC  by  30  June  2002  and  transpose  by  30  April  2003 
Commisson Directive 2002/94/EC of 9 December 2002 - the directive laying down detailed 
rules for implementing certain provisions of Directive 76/308/EEC, as amended by Directive 
2001/44/EC  -  this  report  is  the  first  of  its  kind  based  on  information  communicated  by 
Member  States  relating  to  the  requests  for  information,  notification  and  recovery  sent  and 
received in 2003 and 2004.  

3. 

INTRODUCTORY REMARKS ON TRANSPOSAL AND APPLICATION OF THE DIRECTIVES 

3.1. 

Failure to comply with the deadline for transposal 

As  mentioned  above,  the  basic  Directive  76/308/EEC  was  amended  by  Council  Directive 
2001/44/EC of 15 June 2001, which had to be transposed into national law by 30 June 2002. 
The detailed arrangements set out in Commission Directive 2002/94/EC of 9 December 2002 
had to be transposed into national law by 30 April 2003. 

1 
2 
3 

OJ L 73, 19.3.1976, p. 18. 
OJ L 337, 13.12.2002, p. 41. 
OJ L 175, 28.6.2001, p. 17. 

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Several  Member  States  failed  to  comply  with  the  deadlines  set  by  the  abovementioned 
Directives.  In  one  case,  the  Commission  had  to  refer  the  matter  to  the  Court  of  Justice, 
initiating legal action against the Italy for failure to notify the national measures transposing 
Directive 2002/94/EC (see press release IP/04/1506 of 20/12/2004). 

3.2. 

Application of the directives in relations with the new Member States 

In joined cases C-361/02 and C-362/02 (Tsapalos and Diamantakis), the Court had to decide 
whether Directive 76/308/EEC had to be interpreted as applying to customs claims arising in 
one Member State (Italy) under an instrument issued by that State before the Directive entered 
into force in the other Member State (Greece) where the requested authority was situated. 

In  a  judgment  of  1  July  2004,  the  Court  of  Justice  gave  a  preliminary  ruling  that  Directive 
76/308/EEC (amended) had indeed to be interpreted as applying to customs claims arising in 
one Member State under an instrument issued by this State before the entry into force of the 
aforementioned  Directive  in  the  other  Member  State  where  the  requested  authority  was 
situated.  The  Court  regards  the  provisions  of  the  directive  as  rules  of  procedure,  the 
application of which is not limited to debts incurred after the entry into force of this directive 
in  the  Member  State  where  the  requested  authority  is  situated.  This  is  a  key  decision  in 
particular in the light of the accession of new Member States.  

4. 

ANALYSIS OF THE USE OF MUTUAL ASSISTANCE MEASURES IN 2003-2004 

4.1. 

Introductory remarks 

4.1.1.  Late communication of statistics 

Several  Member  States  supplied  their  statistics  late  despite  the  requirement  laid  down  in 
Article 29 of Directive 2002/94/EC that each Member State should forward this information 
to the Commission by 15 March of each year. 

4.1.2.  Divergence in the statistics 

The  statistics  of  the  various  Member  States  contain  certain  inconsistencies.  When  the 
statistics for 2003 were first submitted, the Commission noted significant differences between 
the figures supplied by each Member State: the number of recovery requests received by all 
the Member States in 2003 amounted to only 70% of recovery requests declared as sent. At 
the meeting of the Committee on Recovery of Claims4 in October 2004, Member States were 
again invited to analyse their statistics. In the rectified figures that the Commission received, 
the  divergence  between  Member  States’  data  is  significantly  lower.  The  total  number  of 
recovery requests received by all Member States in 2003, resulting from this fresh calculation, 
came  to  99%  of  the  number  of  the  requests  declared  as  sent.  However,  for  2004,  the 
difference  went  up  again:  recovery  requests  declared  as  having  been  received  amounted  to 
91% of the number of requests declared as sent. 

Member States need to take more care in establishing their statistics. 

4 

Directive 76/308/EEC, Art. 20. 

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4.2. 

Statistics  

Statistics provided by Member States show wide use of mutual assistance in 2003 and 2004. 

4.2.1.  Requests for information 

According to the statistics communicated by requested Member States, the overall number of 
requests for information received by them amounted: 

– 

– 

in 2003: to 435 

in  2004:  to  727  (of  which  81  received  by  Member  States  which  joined  the  EU  in 
2004) 

4.2.2.  Notification requests 

According  to  the  statistics  communicated  by  requested  Member  States,  the  number  of 
notification requests sent to them was: 

– 

– 

in 2003: 123 

in 2004: 182 (of which 38 received by Member States which joined the EU in 2004) 

4.2.3.  Recovery requests 

According  to  the  statistics  communicated  by  requested  Member  States,  the  number  of 
recovery requests received by all Member States amounted: 

– 

– 

in 2003: to 2797 

in 2004: to 3735 (of which 326 received by Member States which joined in 2004) 

4.2.4.  Total sums recovered 

According to the statistics communicated by requested Member States, the sums recovered by 
these Member States for the claims where their assistance was requested, amounted: 

– 

– 

in 2003: to EUR 5 050 090.55 

in  2004:  to  EUR  13 857 040.55  (including  EUR  375 109.07  recovered  by  Member 
States which joined in 2004 

4.2.5.  Percentage of recovery requests satisfied 

According  to  the  statistics  communicated  by  requested  Member  States,  the  total  amounts 
recovered by these Member States in relation to the total amount of the claims for which their 
assistance was required amounted: 

– 

– 

in 2003: to 1.13% 

in 2004: to 1.82% 

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4.3. 

Evaluation of the statistics  

4.3.1.  General observations 

The  participation  of  Member  States  (either  as  applicant  state  or  requested  state)  differs 
considerably from one Member State to another. This is true both of the old Member States 
and the countries which joined in May 2004. 

This difference is not surprising, since mobility of persons varies from one Member State to 
the  next.  Substantial  mobility  of  persons  between  certain  countries  affects  the  number  of 
mutual assistance requests between them (e.g. between the UK and Ireland). 

The largest number of recovery requests was sent by Germany. According to figures for the 
amounts for which recovery requests were sent in 2004, Germany requested mutual assistance 
for  36.14%  of  the  total  sums  for  which  requests  were  made  in  2004.  Figures  supplied  by 
requested  states  reveal  that  the  German  authorities  recovered  38.59%  of  all  the  amounts 
recovered by Member States in 2004 at the request of other Member States. 

The statistics do not necessarily reflect the overall impact of mutual assistance for recovery 
that Member States afford each other. They do not include the results of any mutual assistance 
given on the basis of other non-Community agreements, such as the Nordic Convention of 7 
December 1989, used by the Scandinavian countries, the multilateral convention of the OECD 
and  the  Council  of  Europe  of  25  January  1988,  or  bilateral  conventions  applied  by  certain 
Member States pursuant to Article 23 of Directive 76/308/EEC. 

The way Member States currently communicate their figures makes it impossible to gauge the 
impact of mutual assistance for the recovery of each type of tax. In order to make this useful 
analysis,  the  Commission  plans  to  propose  that  Member  States  indicate  in  their  future 
statistics the nature of the taxes and levies recovered at the request of another Member State. 

4.3.2.  Reasons for increase in requests from 2003 to 2004. 

The  reasons  for  the  ever-increasing  number  of  mutual  assistance  requests  are  many  and 
varied. 

On the one hand, this development is directly related to the behaviour of the debtors: 

– 

– 

there  has  generally  speaking  been  an  increase  in  mobility  of  persons,  goods  and 
capital  in  the  internal  market,  giving  rise  to  tax  debts  in  Member  States  where  the 
debtors concerned are not - or no longer - established; 

more  specifically,  national  administations  have  also  seen  a  rise  in  fraudulent 
insolvency  where  debtors  organise  their  activities  and  assets  in  such  a  way  that 
forced  recovery  of  tax  claims  becomes  more  difficult  (e.g.  by  setting  up  bogus 
companies). 

On the other hand, the scope of mutual assistance has been significantly widened: 

– 

first, by Directive 2001/44/EC. The Directive widened the scope of mutual assistance 
to all claims relating to income and wealth taxes and taxes on insurance premiums. 
This obviously had an impact on statistics relating to the number of the requests sent 
by the various Member States, in particular from 2004 on (as Commisson Directive 

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2002/94/EC  of  9  December  2002  laying  down  detailed  rules  for  implementing 
certain  provisions  of  Directive  76/308/EEC,  as  amended  by  Directive  2001/44/EC, 
was  transposed  in  the  Member  States  only  in  2003).  That  being  so,  it  is  not  to  be 
ruled out that the increase in requests and in the amounts recovered on the basis of 
the Community legislation is (at least partially) offset by a fall in requests and in the 
results  of  mutual  assistance  previously  granted  on  the  strength  of  non-Community 
agreements or arrangements. 

– 

second,  by  the  extension  of  the  territorial  reach  following  the  accession  of  10  new 
Member States in 2004. 

In  addition,  this  increase  is  probably  also  due  to  the  adoption  of  Council  Directive 
2000/65/EC  of  17  October  20005  under  which  Member  States  could  no  longer  make 
compulsory the appointment of a tax representative within the Community for claims relating 
to  VAT.  This  Directive  probably  increased  the  importance  of  mutual  assistance  for  VAT 
recovery.  

4.3.3.  Divergence between recovery requests and results  

Despite the enormous increase in the amounts recovered through mutual assistance (258% up 
in  2004  compared  with  the  year  before),  there  remains  a  considerable  gap  between  the 
amounts  for  which  requests  for  assistance  in  recovery  are  made  and  the  amounts  actually 
recovered. 

This  comes  as  no  big  surprise.  Experience  generally  shows  that  the  chances  of  recovery 
decrease with the age of the claim. As assistance for recovery abroad takes second place to 
national implementation measures, the effectiveness of this “last resort” is by its very nature 
relative.  This  is  corroborated  by  the  fact  that  claims  which  are  the  subject  of  requests  for 
assistance are at any rate claims whose recovery is difficult. 

When  Member  States  were  asked  to  explain  this  divergence  (see  point  5.2.)  they  also  cited 
other reasons: 

– 

– 

– 

problems  regarding  the  resources  available  to  take  action  on  requests  submitted  by 
other Member States’ administrations, 

communication problems between the competent authorities of the various Member 
States (insufficiently precise and/or current information; poor feedback) and between 
competent authorities of a Member State and its own local services; 

problems due to late presentation of mutual assistance requests which prevented the 
requested authorities from making recovery in time. 

Nor should we lose sight of the fact that figures for the amounts recovered by the requested 
authorities  in  other  Member  States  make  it  impossible  to  measure  the  overall  impact  of  the 
mutual assistance procedures: 

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OJ L 269, 21.10.2000, p. 44. 

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– 

– 

– 

the  figures  do  not  take  account  of  the  amounts  debtors  pay  direct  to  the  applicant 
authorities, following notification of a debt or initiation of a recovery procedure by 
the requested authorities; 

they do not mention any reductions in the amounts claimed and agreed to after the 
sending of mutual assistance requests and claims subsequently contested; 

the figures available concern only those amounts already collected by the requested 
authorities and fail to take account of possible debt settlement plans agreed or results 
achieved by recovery procedures that are often slow or still under way.  

5. 

COMMUNITY INITIATIVES TO BOLSTER MUTUAL ASSISTANCE FOR RECOVERY 

5.1. 

Ongoing support by Member States in the application of mutual assistance 

Whereas  the  new  Community  legislation  adopted  in  2001  and  2002  was  a  prerequisite  for 
improving  mutual  assistance  for  recovery  between  Member  States,  it  had  to  be  flanked  by 
measures  to  strengthen  cooperation  between  the  tax  authorities.  In  order  to  solve  possible 
problems of interpretation or application of the Directives and examine new needs and other 
issues, the Commission provides ongoing support to the Member States through: 

5.1.1.  Assistance from the Committee on Recovery of Claims 

As provided for in Article 20 of Directive 76/308/EEC, as amended by Directive 2001/44/EC, 
the  Commission  is  assisted  by  a  Committee  on  Recovery  of  Claims,  made  up  of 
representatives  of  the  Member  States  and  chaired  by  a  Commission  representative.  It  meets 
regularly  to  discuss  the  questions  and  suggestions  submitted  by  the  Commission  and  the 
Member States. 

5.1.2.  Fiscalis 2003-2007 

The  Fiscalis  Programme  2003-2007,  adopted  by  the  Council  and  the  European  Parliament 
with  the  aim  of  intensifying  day-to-day  cooperation  between  tax  administations  and  tax 
officials, helped finance seminars on mutual assistance for recovery held in Alicante (Spain) 
in  2003,  in  Bruges  (Belgium)  in  2004  and  in  Bratislava  (Slovakia)  in  2005.  Officials  from 
various countries discussed the topics and issues involved. 

5.2. 

New initiatives to improve mutual assistance initiatives 

In  May  2005  the  Commission  sent  Member  States  a  document  inviting  them  to  reflect  on 
ways of improving mutual assistance for recovery and express their opinions on the subject. 
These  ideas  were  taken  up  at  the  last  Fiscalis  seminar  and  will  be  re-examined  at  the  next 
meeting of the Committee on Recovery of Claims. 

The Commission will then table specific proposals in 2007 on the need to foster the practical 
use of the mutual assistance procedures and strengthen and streamline the legislation as much 
as possible. 

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6. 

CONCLUSIONS AND RECOMMANDATIONS 

6.1. 

Conclusions 

Mutual assistance by the national authorities for tax claim recovery is an essential element in 
the fight against tax fraud. 

Statistics  on  mutual  assistance  for  recovery  relating  to  2003  and  2004  show  a  significant 
increase in this form of international administrative cooperation. 

There remains however a huge gap between the amounts for which assistance is requested and 
amounts actually recovered through mutual assistance. 

The  Commission  will make specific proposals  to improve mutual assistance for recovery in 
2007. They will be inspired by the need to facilitate the practical use of the mutual assistance 
procedures and strengthen and streamline the legislation as much as possible.  

6.2. 

Recommandations 

–  Member States should go on making intensive use of the mechanisms for mutual assistance 

for recovery. 

–  They  should  identify  what  human  resources  are  needed  to  handle  mutual  assistance 
requests  expeditiously  as  recovery  chances  decrease  according  to  the  length  of  time  the 
claim concerned has existed. 

–  Member States should ensure better communication between the applicant authorities and 
the  requested  authorities.  The  applicant  authorities  should  be  adequately  informed  and 
should  follow  up  action  by  the  requested  authorities  on  mutual  assistance  requests;  the 
applicant authorities should see that the requested authorities get useful current or updated 
information on the claims and debtors concerned. 

–  Member States should ensure that the statistics to be supplied under Article 25 of Directive 
76/308/EEC and Article 29 of Directive 2002/94/EC are reliable and provided within the 
deadline set by the Community legislation. 

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