Commission staff working document - Annex to the Sixth report under Article 12 of Regulation (EEC, Euratom) n° 1553/89 on VAT collection and control procedures {COM(2008) 719 final}
Date: 2008-11-11
Institutions: European Commission
Subjects: VAT, VAT resource, own resources, report

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 11.11.2008 
SEC(2008) 2759 

Commission staff working document 

Annex to the Sixth report under Article 12 of Regulation (EEC, Euratom) n° 1553/89 on 
VAT collection and control procedures 

{COM(2008) 719 final} 

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   EN 

 
 
 
Annex to the Sixth report under Article 12 of Regulation (EEC, Euratom) n° 1553/89 on VAT collection and control procedures 

Commission staff working document 

Summary of State of Implementation of Report Recommendations 

RECOMMENDATION 

RESPONSE/RESULTS 

STATE OF IMPLEMENTATION 

1.  Tax  authorities  assess  the  impact  on 
voluntary  compliance  of  the  various 
(e.g. 
elements 
tax 
of 
communication 
taxpayers, 
administrative  obligations  of  taxpayers, 
controls 

policy 

with 

2. Member States that do not yet have a 
VAT control plan should develop such a 
plan 

3.  Member  States  should  increase  the 
quality  of  the  information  on  taxpayers 
and  economic  sectors  for  a  better 
targeting of controls 

20  Member  States  mentioned  specific  initiatives 
while  10  provided  general  assurance  that  any 
initiatives  they  took  were  evaluated  –  only  one 
Member  State  provided  any  specific  quantitative 
information.  

Altogether  24  Member  States  responded  but  few 
alluded  to  any  changes  made  since  2003.  6  replied 
that  they  had  no  specific  VAT  control  plan,  with 
only 5 stating they had. The remainder claimed that 
the  elements  comprising  a  VAT  control  plan  was 
integrated in their overall tax control plans. 

16  Member  States  claimed 
there  had  been 
improvements in the quality of information they had. 
Often linked to IT making new sources available or 
allowing the better manipulation and distribution of 
existing  data.  Some  specified  the  VAT  Information 
Exchange System (VIES). 

Member States act to improve voluntary compliance 
but little evidence that their activity is evaluated (the 
nub of the recommendation).  

Although  the  action  recommended  is  clear  and 
unambiguous Member State responses do not permit 
meaningful evaluation as to whether any change has 
been secured as a result of the recommendation. 

The response to our question suggests that Member 
States are, in the main, improving their information 
sources.  

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of 

4.  The  Commission  believes  that  the 
control  programme  should  be  improved 
the 
by  means 
implementation  of  the  control  plan  that 
into 
also 
takes  qualitative  criteria 
the  more 
account  and  not  only 
commonly used quantitative criteria. 

feedback 

on 

8  Member  States  made  no  or  only  very  partial 
replies.  16  provided  only  a  general  description  of 
their system (with 2 alluding to changes made since 
2003 and a further 2 referring to current preparatory 
work). The remaining 3 provided some assurance, 1 
referring to changes since 2003.  

This  modest  recommendation  aimed  to  ensure 
Member States were evaluating the success of their 
control  efforts  and  therefore  could  make  changes 
and  adaptations  where  necessary.  Can  conclude 
from  their  responses  that  the  majority  of  Member 
States can do so.  

5. Increase the awareness at central level 
of the criteria used by the regions when 
selecting firms for control 

9  Member  States  were  not  taking  this  action  or  did 
not reply. The remainder provided assurance that the 
central  level  was  aware.  Only  3  Member  States 
alluded to particular changes since 2003.  

6.  Those  Member  States  that  have  still 
not  equipped  their  auditors  with  the 
necessary IT tools and that do not have a 
specialised 
are 
audit 
recommended to pursue this objective. 

function 

IT 

7.  Electronic  archiving  of  the  control 
adopted 
process 
unconditionally by the Member States.  

should 

be 

All  Member  States  reported  some  procurement  and 
distribution  activity.  There  is  no  evidence  that  any 
Member States lack specialist IT audit but 5 reported 
a lack of audit software although using IT tools for 
the  administrative  tasks  surrounding  audits.  As  to 
evaluating  success  17  made  no  reply,  4  gave  a 
general  assurance  and  only  6  replied  with  any 
vestige of supplementary information. 

With 3 exceptions all Member States responded that 
electronic  archiving  was  now  in  use.  Only  4 
commented  on  evaluation  activity.  A  further  4 
mentioned obtaining management information. 

Again  we  only  have  evidence  that  a  very  small 
number  of  Member  States  have  pursued  increased 
awareness  since  the  recommendation  was  made  but 
have some assurance that the majority consider their 
arrangements adequate. 

Member States are extending their use of IT tools in 
VAT-audit work.  

At first sight response has been good but it is clear 
that  many  Member  States  had  already  started  this 
process  before  the  Commission  recommendation. 
There is little evidence that they are evaluating their 
activity – a key component of the recommendation.  

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8. The structured recording of conducted 
controls  and  control 
results  as  a 
contribution  to  risk  analysis  should  be 
improved  (number  of  visits,  additional 
tax  assessments,  tax  collected  due  to 
controls, etc.). 

Scrutiny of the replies received suggested there were 
9  Member  States  which  had  not  yet  achieved 
systems where the results of controls were fed back 
into  the  risk  analysis  process,  or  where  there  was 
doubt that they had done so. 

9.  Member  States  that  do  not  evaluate 
the  performance  of  individual  control 
officials 
such 
evaluation.  

introduce 

should 

10 To monitor recovery and enforcement 
more  effectively,  Member  States  should 
develop performance indicators to assess 
their  procedures  so  that  they  can  be 
improved where necessary. 

11.  Improve  the  quality  of  information 
on  collected  and  outstanding  debts, 
interest  and  Member 
penalties,  and 
States  should  work 
the 
quality of this information and its use in 
administrative 
the 
processes. 

evaluation 

improve 

of 

to 

Only  1  Member  State  said  that  they  still  did  not 
while 3 made no reply. 12 Member States described 
their standard personnel evaluation procedures. Only 
1 Member State reported a special quality measuring 
exercise. It was also the only State to have evaluated 
its activity.  

 6  Member  States  did  not  specifically  address  the 
to  have  no  such 
question  while  1  appeared 
indicators.  4  Member  States  gave  a  very  general 
description  of  their  systems  (in  1  the  inference  that 
their  system  pre-dated  the  recommendation  was 
clear)  while  another  9  provided  more  specific 
information (3 of which did allude to changes since 
2003).  The 
(7)  provided  general 
statements of assurance (3 making it clear that their 
systems were of long-standing). 

remainder 

Only  1  Member  State  said  it  was  doing  nothing 
although  4  made  no  reply  or  no  relevant  reply.  2 
reported  preparatory  action  while  13  gave  general 
assurance  of  activity  and  7  provided  descriptive 
information. Including those doing preparatory work 
altogether 9 described specific activity since 2003.  

In  evaluating  Member  State  replies  we  merely 
looked for assurance that there was a way for results 
data  to  influence  future  risk  analysis  -  a  minimum 
requirement for a risk analysis system. We conclude 
that  it  is  likely  that  2/3rds  of  Member  States  have 
achieved this.  

This  is  another  instance  where  the  factual  outcome 
underlying the recommendation is in place in nearly 
all Member States. But there is no evidence that the 
complementary activity required - that of evaluating 
success is in place, other than in 1 Member State.  

Although  we  can  draw  some  assurance  from  the 
result  that  only  1  Member  State  seems  to  have  no 
indicators  –  only  3  appear  to  have  introduced  them 
since the Commission published its recommendation 
whereas  4  were  apparently  using  such  indicators  in 
advance of the recommendation. 

About one third of Member States have taken or are 
about to take such action since the recommendation 
was made while a quarter have done nothing or have 
made no report of activity. 

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