Opinion of the European Economic and Social Committee on the Proposal for a Decision of the European Parliament and of the Council establishing a Community programme to improve the operation of taxation systems in the internal market (Fiscalis 2013) COM(2006) 202 final — 2006/0076 (COD)
Date: 2007-01-17
Institutions: European Economic and Social Committee
Subjects: EU programme, cooperation policy, fiscal policy, single market, tax system

27.4.2007

EN

Official Journal of the European Union

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III

(Preparatory Acts)

EUROPEAN ECONOMIC AND SOCIAL COMMITTEE

432nd PLENARY SESSION HELD ON 17 AND 18 JANUARY 2007

Opinion of the European Economic and Social Committee on the Proposal for a Decision of the
European Parliament and of the Council establishing a Community programme to improve the
operation of taxation systems in the internal market (Fiscalis 2013)

COM(2006) 202 final — 2006/0076 (COD)

(2007/C 93/01)

On 23 June 2006 the Council decided to consult the European Economic and Social Committee, under
Article 95 of the Treaty establishing the European Community, on the abovementioned 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 7 December 2006. The rappor-
teur was Mr Burani.

At its 432nd plenary session, held on 17 and 18 January 2007 (meeting of 17 January 2007), the European
Economic and Social Committee adopted the following opinion by 153 votes to two with three abstentions.

1. Conclusions and recommendations

2. Introduction

1.1
The EESC is broadly in agreement with the document
presented by the Commission, but has a few comments to make
and a few reservations about aspects it believes need to be clari-
fied.

1.2 With regard to training, the comments concern the effi-
cacy of the actions undertaken hitherto: it appears that holding
seminars at Community level provides poor value for money,
which raises the question whether it would be more appropriate
to concentrate more on training efforts at national level invol-
ving experts trained by the Commission. Training the trainers
should thus become
the Community
programme.

keystone of

the

2.1
Customs and tax administrations play a key role in
carrying out checks at external borders and protecting the EU's
financial and other interests. In the light of the new challenges
and of the changes that are taking place, it is essential to make
improvements and promote developments, especially in IT. This
communication sets out a Community programme to improve
the operation of taxation systems in the internal market (Fiscalis
2013).

1.3
The reservations concern the unclear aspects surrounding
the provision of data to public bodies other than tax authorities:
the conditions and arrangements for access to data by these
bodies have not been clarified and give some cause for concern,
in particular as regards privacy. The aspect of ownership and
availability of data should also be clarified. Similarly, nothing is
said about the criteria for determining the costs to be passed on
to third parties who request data.

2.2
The operational costs to be borne by the Community
can be broken down into two main categories: Joint Actions
and IT Actions. Joint actions include seminars, project groups,
IT
working visits, multilateral controls and training, whilst
actions cover the functioning and evolution of existing trans
European systems and the development of new systems. The
total amount
is
EUR 156.9 million for
the 2008-2013 period. The 2013
programme is a six year programme aligned with the duration
of the financial perspectives 2007–2013.

to be borne by the Community's budget

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The preamble of the mid-term evaluation document (1)
2.3
of the 2007 programme pays particular attention both to candi-
date countries, who are able to benefit from practical measures
to enable the tax administrations of those countries to under-
take the full range of tasks required under Community legisla-
tion as of the date of their accession, and to countries partici-
pating in the European neighbourhood policy, who will be
invited, under certain conditions, to participate in selected activ-
ities of the programme.

such software and hardware as each participating country
deems appropriate for the correct operation of those systems
throughout its administration. The participating countries are to
ensure that the non-Community components are kept opera-
tional and are interoperable with the Community components.
For its part, the Commission is to coordinate, in cooperation
with the participating countries, aspects relating to the establish-
ment and functioning of the Community and non-Community
components of the systems and infrastructure.

2.4
The said mid-term evaluation has confirmed the need for
organising in a more structured way the information sharing
and knowledge exchange between administrations, between
administrations and the Commission as well as the consolida-
tion of knowledge created during programme events. Therefore,
particular attention should be paid to these aspects.

3. Content of the proposal for a decision

After

a brief

3.1
Fiscalis 2013
programme, defining its terms and content, the document sets
out the following objectives:

introduction to the

a) in respect of value added tax, excise duties and taxes on

income and on capital:

i) to secure efficient, effective and extensive information

exchange and administrative co-operation;

ii) to enable officials to achieve a high common standard of
understanding of Community law and of its implementa-
tion in Member States;

iii) to ensure the continuing improvement of administration
procedures to take account of the needs of administra-
tions and taxable persons through the development and
dissemination of good administrative practice;

b) in respect of taxes on insurance premiums, to improve coop-
eration between administrations, ensuring better application
of the existing rules;

c) in respect of candidate and potential candidate countries, to
meet the special needs of those countries as regards tax legis-
lation and administrative capacity;

d) in respect of third countries, in particular those participating
in the European Neighbourhood policy, to improve coopera-
tion with the tax administrations of those countries.

3.2
In order to achieve these objectives, the Commission is
annually to establish a work programme. This programme will
be based on the operation of the communication and informa-
tion exchange systems, which the Commission will provide to
all participating countries. The communication and information
exchange systems will comprise various common networks and
systems (CCN/CSI, VIES, EMCS, etc.). The non-Community
components of the said systems will comprise the national data-
bases forming part of these systems, the network connections
between the Community and non-Community components and

(1) Commission staff working paper — Mid-term evaluation of the Fiscalis
2007 programme (SEC(2005) 1045), available in German, English and
French.

3.3
The Commission and the participating countries are to
organise joint seminars and project groups and ensure the disse-
mination of the outcome of these. The participating countries,
for their part, are to organise working visits for their officials.
The Commission, in cooperation with the participating coun-
tries,
is to develop the systematic and structured sharing of
information resulting from programme activities.

3.4
The expenditure necessary for the implementation of the
programme is to be shared by the Community and the partici-
pating countries.

The Community is to bear the following expenditure:

a) the cost of the acquisition, development, installation, mainte-
nance and day-to-day operation of the Community compo-
nents of
the communication and information exchange
systems (set out in Article 6(3));

b) the travel and living expenses incurred by officials from the
relating to multilateral controls,

participating countries
working visits, seminars and project groups;

c) the organisational costs relating to seminars, as well as travel
and living expenses incurred for the participation of external
experts and participants (referred to in Article 11);

d) the cost of the acquisition, development,

installation and
maintenance of training systems and modules insofar as they
are common to all participating countries;

e) the costs of any other activity referred to in point f of Article

1(2).

The participating countries are to bear the following expendi-
ture:

a) cost of

the development, acquisition,

installation, mainte-
nance and the day-to-day operation of the non-Community
components of
information
the
exchange systems (set out in Article 6(4));

communication and

b) costs relating to the initial and continuing training, including

linguistic training, of their officials.

3.5
As regards monitoring, it is mentioned — without any
details being given — that the programme is to be subject to
continuous joint monitoring by the participating countries and
the
the Commission. Mid-term and final
programme are also provided for.

evaluations of

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4. Introduction: main guiding principles of the programme

5. General comments

4.1
The document put forward by the Commission is simply
the fulfilment of the commitment made to the European Parlia-
ment and the Council under Article 15(4)(a) of
the Fiscalis
2003-2007 decision. On the basis of that commitment, the
Commission adopted a communication (COM(2005) 111, 6
it would be appropriate to
April 2005), which stated that
launch two programmes, Fiscalis 2013 and Customs 2013, both
aimed, under the respective competences, at continuing the two
existing programmes Fiscalis 2003-2007 and Customs 2007.
This EESC document comments on the Fiscalis programme; a
separate opinion deals with the Customs programme.

4.2
The 2013 programme, which runs for the period 2008-
2013, does not introduce anything significantly new in compar-
ison with the current programme.
is aimed at
improving its efficiency along lines inspired by the relaunch of
the Lisbon strategy;
its purpose is to continue and
develop cooperation among tax authorities of Member
States (and those about to accede) in pursuing the goals set in
the initial programme:

Instead,

thus,

it

— ensuring common application of Community tax legislation;

— the protection of national and Community financial interests;

— the smooth functioning of the internal market through the

combating of tax avoidance and evasion;

— the avoidance of distortions of competition;

— reducing the burden of compliance on authorities and

taxpayers.

4.3
The Commission document was drawn up following in-
depth analyses of the current situation, based inter alia on visits
to various Member States and contacts with authorities, experts
and taxpayers. The result is that the 2013 programme is set up
as an extension of the 2007 programme reinforced with
additional financial resources‘to support new policy initiatives
increase of the
on the one hand and to foresee a marginal
budget of all other sub-headers on the other hand’. The EESC
agrees with this decision.

4.4
As stated in point 2.2, the total cost of the 2008-
2013 programme is EUR 168.47 million; the operating costs
to be covered by the EU budget make up the bulk of this
(EUR 156.9 million). These latter are subdivided into two main
categories:
Joint Actions cover
seminars, project groups, working visits, multilateral controls,
training, and any other activities necessary to achieving the
objectives. IT actions cover the functioning and evolution of
existing trans-European systems and the development of new
systems.

Joint Actions and IT Actions.

The EESC can only agree that there is a need to continue
5.1
the Fiscalis programme along the same broad lines as before; it
therefore supports the Commission's initiative, not least because
it is confident that some aspects will be improved, in particu-
lar those relating to the efficacy of joint training courses and to
the use of languages. Moreover, the Commission itself has high-
lighted these deficiencies in a document (2) that also contains
suggestions as to how to resolve them.

5.2
There are two main types of training: one at Community
level, financed out of the EU budget, and the other at national
level, generally financed by the individual Member States
includes training in the strict
concerned. The term ‘training’
sense of the word (i.e. instruction in clearly specified subjects of
a technical, legal or administrative nature under the guidance of
specialists in each subject), seminars (generally of a multi-disci-
plinary nature and with the participation of officials from more
than one country), and staff exchanges (of individuals or in
groups).

5.3
the
In the document mentioned in point 5.1 above,
Commission provides a detailed report on the initial results of
the training programmes. The picture that emerges from this
is fairly satisfactory; the document is honest enough not to
gloss over various gaps and deficiencies, and sketches out
possible ways to eliminate or reduce the problems. That said,
things could not really be otherwise if everything is taken into
consideration: the complexity of the programme, the number of
Member States involved, the diversity of existing systems, the
varying levels of experience and organisation of national autho-
rities, and not least the large number of languages — this latter
being an obstacle that is common to all EU programmes and is
often underestimated. The main problem remains
that of
setting a common minimum standard of knowledge and
professional skills measurable within minimum parameters
acceptable and applicable to all Member States.

5.4
As stated in point 3.5, the Commission will monitor
the proper implementation of the programmes; the EESC
believes that it is especially important that the proper imple-
mentation of common standards and full awareness of Com-
munity values are monitored. Such checks are essential, not
just because it must be ensured that Community funds have
been properly spent in accordance with the general principles of
public accounting, but also because it cannot be left to the
Member States alone to determine the standard of training for
their own officials.

Given the complexity of

the subject matter, the
5.5
EESC will refrain from making suggestions, but will simply
express a few — hopefully objective — thoughts, without
worrying about whether or not these are politically correct.

(2) See footnote 1.

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First of all, it is well known that the level of profes-
5.5.1
sional skills and experience of national officials varies consider-
ably from one Member State to another. It is therefore extremely
difficult to envisage a common training module using seminars
open to a wide range of participants. Linguistic diversity adds a
further concern: the impression gleaned from listening directly
to the speaker in his own language is one thing; the effective-
ness of hearing the message via an interpreter is quite another.
Moreover, audiovisual aids
(slides, diagrams, acetates, etc.)
cannot be seen in the participants' languages — and the impor-
tance of visual memorisation of messages is well known. In
conclusion, one might wonder whether such seminars — whose
organisation is expensive in terms of human and financial
resources — should perhaps be reduced to a minimum or at
the programme is more mature. The
least postponed until
savings this would bring,
in terms of money and human
resources, could perhaps be used to finance — at least in part
— training at national level in relatively disadvantaged coun-
tries, in particular those that recently joined the EU.

5.5.2
In the Commission's evaluation document, there is no
mention of what appears to be a fundamentally important
element: training at EU level of national trainers. This should
be the keystone of the whole system: only a trainer who
speaks the participants' language can ensure that the message
gets across efficiently, and above all that the discussions, a key
part of the training, are effective. Above all, however, only a
national trainer is able to adopt a teaching method for the transi-
tion of his own national system, of which he needs an in-depth
knowledge, to the Community system. The selection of persons
to individual national
qualified for this task should be left
authorities. A high level of expertise and teaching ability should
be essential prerequisites; the same applies to the people who
will have to take care of EU training of national trainers. Finally,
experts believe that
training cannot be done
through short seminars: there need to be courses lasting at least
a couple of months.

this kind of

An important and entirely different aspect is that of
5.6
connecting the Fiscalis system — in particular
the part
concerning VAT and excise duties — with the Customs 2013
system. In its opinion on the Proposal for a Decision of the Euro-
pean Parliament and of the Council on the implementation of a paper-
less environment for customs and trade programmes (3), the EESC
drew attention to the second recital of the proposal for a deci-
sion of the EP and the Council (4): ‘The pan-European eGovern-
ment action … requires measures to increase the efficiency …

(3) EESC opinion on Paperless environment for customs and trade , OJ C

318, 23.12.2006, p. 47, point 2.5.

(4) Proposal for a Decision of the European Parliament and of the Council
on the implementation of a paperless environment for customs and
trade programmes (COM(2005) 609 final).

to help combat fraud, organised crime and terrorism’. That
opinion emphasised that a structural link between the files of
customs and VAT administrations could be useful for detecting
fraud concerning goods imported from third countries, in par-
ticular counterfeiting of origin marking.

5.6.1
In the Fiscalis programme, there is no mention of any
structural link between Fiscalis files and those managed by other
authorities: only in the fifth recital of the proposal for a decision
does it say that
‘it should be possible to include in the
programme further tax related information exchange systems
such as the Excise Movement Control System (EMCS)’, but this
obviously only refers to information exchanged between tax
authorities.

5.6.2
In the opinion mentioned in point 5.6, the EESC also
mentioned the recommendation by the EP and the Council (5),
which set out a series of measures ‘securing police, customs and
judicial cooperation’ so as to facilitate the implementation of the
Hague Programme (6) on EU security,
including the fight
against trafficking in restricted or prohibited goods. The link
mentioned in the previous point would make possible, via
customs services, checks that are currently not possible. This
would be a way for tax authorities to make an indirect contribu-
tion to the Hague Programme. The EESC is well aware that,
with the programmes already in progress and with procedures
that are now well established, it is no longer possible to carry
out a project of that kind. All that remains is to recommend
that it should be borne in mind that structural links between
the EU's and Member States' various databases should be
part of the EU's strategic programmes, not just for the purposes of
security, but also for those of numerous other economic and
social policy objectives.

6. Specific comments

6.1
Article 3: Participation in the programme. The
programme is open to Member States, candidate countries and
‘potential’ candidates, as well as to certain partner countries of
the European neighbourhood policy, on the condition that these
have reached a sufficient level of approximation of the relevant
legislation. The aim of that provision is certainly laudable and
consistent with the objective of creating as large a ‘tax area’ as
possible. However, the EESC does wonder whether the project
might be too ambitious, given the resources available and the
difficulties in implementation already encountered, which would
increase if more participants were included.

(5) Communication from the Commission to the Council and the Euro-
pean Parliament: Area of freedom, security and justice: Assessment of
the Tampere programme and future orientations COM (2004) 401
final.

(6) Communication from the Commission to the Council and the Euro-
pean Parliament: The Hague Programme: Ten priorities for the next five
years — The Partnership for European renewal in the field of Freedom,
Security and Justice (COM(2005) 184 final)

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Article 6: Communication and information-exchange
6.2
systems. The Community components of
the system are
limited to hardware, software and network connections shared
by all the participating countries. Everything else (databases,
network connections between the Community and non-Com-
munity components, hardware and software for the operation
of individual systems)
is considered as constituting the non-
Community components.

6.2.1
The classification mentioned in the previous point
seems proper; however, some concern is aroused by the rule in
Article 6(6), according to which ‘the Commission may make
the communication and information exchange systems available
to other public services for tax or non-tax purposes provided
that a financial contribution is paid to the programme budget’.
the
The word ‘other’
Commission has a duty to specify which public administra-
tions would be authorised to obtain information, with
what guarantees and what checks. The EESC suggests that,
in order to eliminate any doubt, it should be specified that
information can only be supplied within the scope of the
plan for judicial cooperation and with the guarantees
provided by the applicable rules, and always in accordance
with the rules on privacy.

ambiguous:

somewhat

seems

The EESC believes that this provision should be made
6.2.2
clearer: at first reading, it does not appear that the Commission
has the power to disclose to third parties — whoever they may
be — information that is certainly the property of each Member
State if said information is contained in the databases of that
country; on the other hand, if we are talking about information
that is in the Commission's immediate possession, this raises the
question of whether the Commission can make use of it freely
without the consent or knowledge of the Member States. In
other words: do data sent to the Commission, or collated by it
on the basis of communications from Member States, automati-
cally become the property and the business of the Commission?
What criteria are used to determine the costs to be passed
on to requesting third parties, and to whom does the
money thus acquired belong? And, in any case, can the data
in the Commission's possession be passed on to third
parties without
relevant Member States being
informed, either beforehand or afterwards? The EESC
believes that these questions are of fundamental
impor-
tance, and that the Commission should answer them in a
way that clarifies its position without leaving any room for
doubt.

the

Brussels, 17 January 2007.

The President

of the European Economic and Social Committee

Dimitris DIMITRIADIS