Report from the Commission to the European Parliament and the Council - Final evaluation of the Fiscalis programme 2003-2007 in accordance with Article 15 of Decision 2235/2002/EC of the European Parliament and 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)
Date: 2008-10-09
Institutions: European Commission
Subjects: EU programme, action programme, budget, cooperation policy, fiscal policy, report, single market, tax system

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 9.10.2008 
COM(2008) 623. final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

Final evaluation of the Fiscalis programme 2003-2007 in accordance with Article 15 of 
Decision 2235/2002/EC of the European Parliament and 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) 

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REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

Final evaluation of the Fiscalis programme 2003-2007 in accordance with Article 15 of 
Decision 2235/2002/EC of the European Parliament and 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) 

1. 

THE FISCALIS PROGRAMME 2003-2007 

The  Fiscalis  programme  2003-2007  was  established  by  Decision  2235/2002/EC  of  the 
European  Parliament  and  of  the  Council  of  3  December  2002.  It  was  the  third  Community 
action programme in the field of taxation, and covered the period from 1 January 2003 to 31 
December  2007.  Participation  in  the  programme  was  open  to  the  27  EU  Member  States,  as 
well as to Croatia and Turkey. The cost of the programme was shared between the European 
Community and the participating countries.  

The  programme  was  aimed  at  improving  the  operation  of  taxation  systems  in  the  internal 
market  by  increasing  cooperation between  participating  countries,  their  administrations,  and 
officials. In the area of indirect taxation, and in particular value added tax and excise duties, 
the programme's objectives were: (i) to enable officials to achieve a high common standard of 
understanding of Community law and of its implementation in Member States; (ii) to secure 
efficient,  effective  and  extensive  cooperation  among  Member  States;  and  (iii)  to  improve 
administrative  procedures.  In  the  area  of  direct  taxation,  Fiscalis  was  intended  to  support 
information  exchange  in  the  field  of  mutual  assistance  and  to  raise  awareness  of  the 
applicable  Community  law.  For  taxes  on  insurance  premiums  the  goal  was  to  improve 
cooperation between Member States, ensuring better application of the existing rules. Finally, 
the  programme  had  the  specific  objective  of  satisfying  the  special  needs  of  candidate 
countries  so  that  they  could  take  the  necessary  measures  for  accession  in  the  field  of  tax 
legislation and administrative capacity. 

To achieve its objectives the programme relied primarily on: 

•  Joint  actions,  including  seminars,  project  groups,  exchanges  of  officials,  multilateral 
controls,  training  activities  and  other  actions.  Approximately  36%  of  the  Fiscalis  budget 
was spent on joint actions. 

•  Communication  and  information-exchange  systems,  aiming  at  securing  exchange  of 
information  through  trans-European  computerised  networks.  They  included  the  VAT 
Information Exchange System (VIES) and a number of other applications used in the VAT, 
Excise and direct taxation fields. Around 64% of the programme budget was earmarked for 
IT  systems,  including  the  funding  of  part  of  the  networking  platform  shared  with  the 
Customs  2007  programme  (Common  Communications  Network/Common  Systems 
Interface). 

The  financial  framework  for  the  five  years  of  the  programme’s  implementation  was  set  at 
EUR 67.25 million. 

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2. 

THE PURPOSE OF THE FINAL EVALUATION 

Article  15  of  Decision  2235/2002/EC  stipulates  that  "the  final  evaluation  [of  the  Fiscalis 
programme  2003-2007]  shall  assess  the  effectiveness  and  efficiency  of  the  programme's 
activities" in relation to the objectives. The latter's relevance had already been examined at the 
time of the mid-term evaluation, carried out in 2004-05. 

The final evaluation was launched in November 2007 and finalised in June 2008. It covered 
the entire scheme (2003-2007).  

The  European  Commission  commissioned  Deloitte  to  perform  the  final  evaluation  of  the 
Fiscalis programme 2003-2007. Four evaluation criteria were examined: 

•  Effectiveness of Fiscalis in reaching its objectives; 

•  Efficiency, considering the resources used and the results obtained; 

•  Utility  of  the  programme  results  vis-à-vis  the  needs  identified  and  the  resolution  of 

problems; 

•  Sustainability of the programme results in the medium and long term. 

The  effectiveness  criterion  was  articulated  in  seven  evaluation  questions,  reflecting  the 
programme's  objectives  and  instruments.  Three  further  questions  were  formulated  for  the 
other three criteria. The evaluation assessed the effects of Fiscalis in a broad sense, using a 
mix of qualitative information and quantitative data (where available) to judge its impact and 
effectiveness. 

3. 

METHODOLOGY 

The evaluation focused on both qualitative and quantitative aspects: 

•  The sources of qualitative information were reports on programme activities (produced by 
participating countries), interviews with Commission and participating countries' officials, 
case studies on three selected topics in three participating countries and, to some extent, the 
web-based survey (see next point). 

•  The sources of quantitative information were: 

•  A comprehensive web-based survey for different recipient profiles (participants in 
programme  activities,  national  Fiscalis  management  teams  and  key  national  tax 
officials); 

•  Existing reports and data available from the Commission. 

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The  evaluation  findings  are  predominantly  based  on  primary  information  sources,  those 
providing  information  directly  to  the  evaluator:  interviews,  questionnaires  collecting  the 
views of respondents, seminar evaluation forms.1  

4. 

FINDINGS AND CONCLUSIONS 

Transnational  tax  cooperation  activities  take  place  in  a  specific  legal  context,  at  both 
European  and  national  level.  Cooperation  between  participating  countries  via  Fiscalis 
activities  also  took  place  within  this  legal  context.  Consequently,  the  scope  for  developing 
certain Fiscalis activities was subject to legal boundaries (e.g. Directives and Regulations in 
the fields of administrative cooperation and mutual assistance). 

The Fiscalis 2003-2007 objectives were broadly formulated, allowing participating countries 
and the Commission to propose a wide range of activities and topics. The valuable flexibility 
of  the  programme  made  it  possible  to  take  into  account  the  evolution  of  tax  legislation,  the 
evolving needs of participating countries and the priorities set by all parties. This aspect made 
the  activities  particularly  useful  for  participants  and  national  administrations.  Nevertheless, 
tax officials expressed the need for even more focused and tailor-made activities. 

The evaluation established that the programme reached its overall objective by increasing the 
cooperation  between  participating  countries,  their  administrations  and  officials.  Officials 
effectively  and  extensively  cooperated  by  implementing  and  using  communication  and 
information-exchange systems. Although there is room for improvement of these systems in 
terms  of  speed,  data  accuracy  and  reliability,  they  were  successful  and  vital  as  a  means  to 
connect  all  national  administrations,  especially  in  the  field  of  indirect  taxation.  The  joint 
actions (i.e. seminars, exchanges of officials, multilateral controls and project groups) fostered 
“extensive  cooperation”  on  many  different  subjects,  contributing  in  particular  to  the 
“networking” among tax officials. The Commission encouraged the participating countries to 
increase  cooperation  (in  multilateral  controls  for  instance).  Nevertheless,  the  extent  of 
cooperation  largely  depends  on  the  participants  and  their  position  within  the  national 
administrations.  

The main area covered by the programme is indirect taxation (VAT and Excise). In this field, 
the  programme  encompassed  a  great  many  relevant  activities.  Fewer  actions  with  a  direct 
taxation  objective  were  organised  under  the  programme,  but  they  are  increasingly  seen  as 
necessary  in  this  field  and  the  number  of  activities  is  expected  to  rise  in  the  future.  The 
programme  did  not  fund  activities  on  insurance  premiums  taxation  because  participating 
countries did not express specific needs in that area. 

The activities developed were complementary to each other, and there was a clear logic as to 
why  a  certain  instrument  was  chosen  to  obtain  a  particular  result.  The  lack  of  structured 
reporting  on  the  activities’  outcomes  in  the  participating  countries  has  hindered  the 
availability of evidence on the programme results, and thus represents a missed opportunity to 
organise  the  follow-up  of  events.  This  lack  of  reporting  reduced  the  programme's  visibility 
within administrations and may explain the somewhat limited support for the programme at 
senior levels. 

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Limited  information  was  available  from  secondary  sources,  such  as  reports  by  Member  States  on  the 
results of programme activities (when collected).  

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Within  each  participating  country,  participants  had  a  reporting  obligation  and  some  good 
practices  in  knowledge-sharing  emerged.  However,  the  dissemination  of  information  was 
limited to a small circle, lacking an overall structured approach to knowledge-sharing. 

The  countries  that  joined  the  EU  on  1  May  2004  and  on  1  January  2007  were  already 
participating  in  the  programme  on  an  equal  footing  with  the  existing  Member  States  before 
accession. This has been considered as positive by both the old and new Member States. 

In  conclusion,  Fiscalis  2003-2007  was  an  efficient  programme  as  the  formal  and  informal 
cooperation  created  was  highly  valuable  compared  to  the  programme's  cost.  As  regards  the 
informal cooperation, it should be continuously supported by the programme in the future to 
maintain the existing networks and to extend their scope (on new subjects and with additional 
national tax officials). 

5. 

RECOMMENDATIONS 

•  The  evaluation  recommends  that  the  Commission  (EC)  and/or  the  participating  countries 

(PC): 

•  continue ensuring the flexibility of the programme (EC); 

•  create a taxonomy of programme activities, linking each type of action to the programme 
objectives  and  making  information  on  programme  activities  and  their  outputs  more 
accessible to the stakeholders (EC); 

•  develop  performance  and  result  indicators  for  the  programme,  in  addition  to  the 
performance indicators already existing for the communication and information-exchange 
systems, in order to systematically measure the impact of the programme (EC); 

•  collect information on actual results in a structured manner and establish an audit trail for 
the  different  activities.  The  use  of  web-based  evaluation  and  reporting  tools  should  be 
explored. Additional reporting duties should put as little additional strain on resources as 
possible (EC/PC); 

•  improve and structure the information dissemination of the programme outputs (EC); 

•  raise awareness of senior managers within national administrations by developing specific 
activities  to  increase  dissemination  of  information  and  support  the  programme's 
development. Senior managers should be more informed about the possibilities offered by 
the programme to respond to their needs (EC/PC); 

•  ensure  the  sustainability  of  networks  of  officials,  beyond  Fiscalis  activities.  The  use  of 
online  collaboration  tools  (e.g.  meetings  on  the  web)  should  be  explored,  taking  into 
account the legal constraints for exchange of information (EC); 

•  continue  optimising  the  communication  and  information-exchange  systems  and  urge 
national stakeholders to improve the speed and accuracy of data exchanged. The relation 
with the joint actions should be strengthened in order to allow Member States to formally 
express  their  needs  and  expectations  from  the  communication  and  information-exchange 
systems (EC/PC); 

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•  develop  common  training  modules  on  taxation  topics  and  continue  supporting  blended 

learning (EC/PC); 

•  encourage  the  use  of  multilateral  controls  by  all  Member  States  when  appropriate. 
Multilateral  controls  are  a  very  important  tool,  indispensable  to  effectively  control  the 
correct application of Community legislation, to fight fraud and to deal with tax avoidance. 
Furthermore, they have a strong dissuasive effect on taxpayers who want to abuse the tax 
system (EC/PC); 

•  consider developing activities on insurance premium taxes and further stimulate activities 

on direct taxation (EC/PC); 

•  continue  using  the  programme  to  encourage  brainstorming  on  existing  and  prospective 

issues ahead of the legislative process (EC/PC); 

•  enhance the Fiscalis  programme identity  and  make  it  a  synonym  for  tax  cooperation  in 
the  EU.  This  could  include  wider  use  of  the  Fiscalis  logo  to  identify  programme  tools, 
activities and outputs (EC/PC). 

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