Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee on a coordinated strategy to improve the fight against VAT fraud in the European Union
Date: 2008-12-01
Institutions: European Commission
Subjects: EU Member State, VAT, administrative cooperation, cooperation policy, exchange of information, fraud against the EU, tax avoidance, tax evasion

EN 

EN 

   EN 

 
 
COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 1.12.2008 
COM(2008) 807 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE 
EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE  

On a coordinated strategy to improve the fight against VAT fraud in the European 
Union 

EN 

   EN 

 
 
 
  
TABLE OF CONTENTS 

1. 

2. 

3. 

3.1. 

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

Necessary community approach .................................................................................. 4 

A short term action plan............................................................................................... 4 

Measures enhancing tax systems and tax co-operation with a view to the prevention 
of VAT fraud................................................................................................................. 5 

3.1.1.  Common minimum standards for the registration and deregistration of taxable 

persons.......................................................................................................................... 5 

3.1.2.  Confirmation of information ........................................................................................ 5 

3.1.3. 

Invoicing rules.............................................................................................................. 6 

3.1.4.  Chargeability on intra-Community transactions .......................................................... 6 

3.2. 

Measures enhancing the efficiency of Tax Administration with a view to the 
detection of VAT fraud ................................................................................................. 6 

3.2.1.  Legislative proposal to combat tax evasion connected to intra Community 

transactions: reducing timeframes................................................................................ 6 

3.2.2.  Exemption of VAT at importation ............................................................................... 7 

3.2.3.  Enhancing cooperation between Member States ......................................................... 7 

3.2.4.  Automated access to data ............................................................................................. 7 

3.2.5.  EUROFISC .................................................................................................................. 8 

3.3. 

Measures enhancing Tax Administration capacity to collect and recover taxes ......... 8 

3.3.1. 

Joint and several liability ............................................................................................. 8 

3.3.2.  Recovery of taxes......................................................................................................... 9 

3.3.3.  Shared responsibility for the protection of all Member States revenues ..................... 9 

3.4. 

A set of legislative proposals ....................................................................................... 9 

4. 

5. 

Reflections going beyond the immediate proposals................................................... 10 

Conclusion.................................................................................................................. 11 

EN 

2 

   EN 

 
1. 

INTRODUCTION 

In May 2006 the Commission presented a Communication1 with a view to launching 
at EU level a profound debate on the need for a co-ordinated approach in the fight 
against fiscal fraud in the internal market. Intense and fruitful discussions followed 
within  the  different  European  institutions,  with  Member  States  and  business 
representatives. 

The  Commission's  Communication  of  23  November  20072  concerning  some  key 
elements  contributing  to  the  establishment  of  the  anti-fraud  strategy  within  the  EU 
and the accompanying report on the state of play of the discussions within the Anti 
Tax Fraud Strategy (ATFS) expert group3 provide a good overview of the follow-up 
that has been given until then to the 2006 Communication. These documents served 
as the basis for the Council conclusions of 4 December 20074. 

In February 2008 the Commission presented a Communication on its analysis of two 
more  'far  reaching'  measures  to  change  the  VAT  system  in  order  to  fight  fraud5, 
namely a system of taxation of intra-Community transactions and a general reverse 
charge  system.  The  Commission  also  demonstrated  its  willingness,  under  certain 
conditions, to work out a pilot project in order to establish whether a reverse charge 
could be an appropriate response to tackle VAT fraud or not.  

The  following  ECOFIN  Council  could,  however,  not  agree  on  Conclusions  as 
regards  the  issues  raised  in  this  Communication.  In  the  absence  of  political 
agreement  on  the  more  'far  reaching'  measures,,  the  Commission  has  decided  to 
concentrate  its  efforts  exclusively  on  the  so-called  'conventional'  measures  to 
enhance the traditional methods in the fight against tax fraud. 

The objective of the present Communication is to set out a coherent short term action 
plan and a time schedule for the envisaged actions. This Communication intends also 
to  initiate  a  reflection  on  a  longer  term  scale  notably  about  the  relation  between 
taxpayers  and  Tax  Administrations  and  the  opportunities  offered  by  IT  in  that 
context. 

It  should  be  recalled  that  the  Communication  presented  in  2006  covered  all  taxes. 
Subsequent discussions however made it very clear that absolute priority needs to be 
given to VAT fraud. 

This Communication therefore only relates to VAT and the recovery of taxes. This 
does  not  mean  that  no  actions  will  be  undertaken  in  other  areas;  in  particular  the 
Commission  will  present  shortly  a  proposal  in  view  of  strengthening  the 
administrative  co-operation  arrangements  for  taxes  other  than  VAT  and  the 
harmonised Excises.  

1 
2 
3 
4 
5 

COM(2006)254 final, 31.5.2006  
COM(2007)758 final, 23.11.2007 
SEC(2007)1584, 23.11.2007 
Council Conclusions 4 December 2007, 15698/07 (Presse 270) 
COM(2008)109 final, 22.2.2008 and SEC(2008)249, 22.2.2008 

EN 

3 

   EN 

 
                                                 
2. 

NECESSARY COMMUNITY APPROACH 

The need to establish an anti-fraud strategy to combat tax fraud at Community level 
to complement and support national efforts has been recognised by the Council in its 
conclusions  of  November  2006  and  June  20076.  The  European  Parliament  has  also 
expressed its support for an EU fiscal fraud strategy.  

An  efficient  fight  against  VAT  fraud  within  an  internal  market  requires  a  common 
approach  both  in  the  legislative  field  but  also  on  certain  aspects  of  the  operational 
management  of  the  VAT  system  which  until  now  have  been  left  exclusively  to  the 
Member States.  

Indeed,  operational  differences  between  Member  States  can  provide  fraudsters  the 
opportunity  to  undermine  the  efficiency  of  the  underlying  Community  legislative 
measures  by  shifting  their  operations  to  those  Member  States  that  have  not 
implemented these measures in an effective way. 

Differences  in  national  procedures  are  also  amplifying  considerably  business 
compliance  costs.  The  national  procedures  put  in  place  for  the  fulfilment  of  VAT 
obligations by electronic means is a good example of this. 

When elaborating legislative proposals the Commission carefully balances the need 
for a Community approach and the respect of national structures and the practices of 
Tax Administrations. It is essential for the efficiency of the measures proposed that 
this  carefully  defined  balance  is  respected  and  maintained  during  the  whole 
negotiation process within the institutions. 

3. 

A SHORT TERM ACTION PLAN 

The  reports  already  presented  by  the  Commission7  on  the  state  of  play  of  the 
discussions  within  the  Anti  Tax  Fraud  Strategy  (ATFS)  expert  group  gave  an 
overview of the different measures that have been analysed. 

Guiding principles have been: 

–  the need of Tax Administrations for quick and accurate information; 

–  optimising the use that Tax Administrations make of this information; 

–  enhancing the possibilities to act against fraudsters; 

–  respecting the needs and expectations of legitimate businesses, in particular not to 
to  additional 

be  exposed 
to  unnecessary  administrative  burdens 
compliance costs and to have legal certainty guaranteed. 

leading 

A number of suggested measures have been abandoned because they did not respect 
these guiding principles. 

6 

7 

Council  Conclusions  28  November  2006,  15502/06  (Presse  332)  and  5  June  2007,  10319/07  (Presse 
126) 
SEC(2007)740, 25.05.2007 and SEC(2007)1584, 23.11.2007 

EN 

4 

   EN 

 
                                                 
For  other  measures,  it  will  be  essential  to  find  the  right  balance  between  these 
principles which are to a certain extent conflicting.  

The measures that  the Commission will propose or implement can be grouped into 
three categories. A first category aims at preventing potential fraudsters from abusing 
the VAT system, a second one aims at enhancing the tools for the detection of VAT 
fraud, and a third category aims at improving the possibilities for the collection of tax 
lost as a result of fraud and the punishment of fraudsters. 

3.1.  Measures  enhancing  tax  systems  and  tax  co-operation  with  a  view  to  the 

prevention of VAT fraud  

3.1.1.  Common  minimum  standards  for  the  registration  and  deregistration  of  taxable 

persons 

A correct and valid VAT identification number is an essential element in the current 
VAT arrangements as it determines the applicable rules and obligations notably for 
intra-Community  trade.  Both  Tax  Administrations  and  business  need  to  rely  on 
correct information about the VAT status of a trader. However, currently this data is 
not  always  reliable.  Some  Member  States  keep  VAT  identification  numbers  valid 
even where the taxable person concerned is proven to be involved in VAT fraud and 
has gone missing. Moreover, the moment of registration is also crucial for verifying 
whether the business will carry out a real economic activity. Fraud can be prevented 
by making it more difficult for potential fraudsters to present themselves as taxable 
persons registered for intra-Community trade. 

Businesses and Tax Administrations must be able to rely on the information they can 
obtain  on  the  VAT  status  of  a  person.  Confidence  in  the  information  could  be 
increased by the introduction of minimum standards at EU level for registration and 
deregistration  of  taxable  persons  in  VIES.  These  minimum  standards  include 
objective  data  to  be  provided  by  the  trader  before  obtaining  a  VAT  identification 
number, to the obligation to eliminate the VAT identification number from the VIES 
database when certain conditions are met and to certain objective criteria that have to 
be fulfilled during the registration and deregistration procedures. In its conclusions of 
4  December  2007,  the  Council  recognised  the  importance  of  having  up-to-date 
information  on  the  status  of  traders  for  the  correct  functioning  of  the  VAT 
arrangements  ruling  intra-Community  trade  and  supported  further  work  on  a 
common approach to registration and de-registration of traders. The Commission will 
present a legislative proposal including common minimum standards as envisaged in 
this paragraph. 

3.1.2.  Confirmation of information 

The information concerned needs also to be made available to economic operators in 
the  most  efficient  way.  At  present  traders  can  verify  the  validity  of  the  VAT 
identification  number  of  their  business  partners  identified  for  VAT  purposes  in 
another  Member  State.  However,  only  certain  Member  States  provide  information 
about the name and address of that business partner. An agreement has already been 
reached  to  ensure  that  confirmation  of  the  name  and  address  can  be  obtained 
electronically for all Member States. This confirmation should also offer more legal 
certainty  to  the  requesting  person  as  it  will  be  binding  for  the  Tax  Administration 

EN 

5 

   EN 

 
concerned.  The  Commission  intends  to  lay  down  the  detailed  arrangements  in  a 
legislative proposal. 

3.1.3. 

Invoicing rules 

Invoicing  is  a  central  element  in  the  current  VAT  system.  A  legislative  proposal 
aiming at a simplifying, harmonising and modernising the current rules on invoicing 
should  reduce  administrative  burdens  for  businesses.  Facilitating  compliance  with 
these rules will clearly have a fraud preventive effect. 

Measures such as common storage periods and harmonised rules concerning the time 
by  which  an  invoice  must  be  issued  can  facilitate  controls  in  the  Member  States. 
Examples  exist  today  whereby  the  rules  applicable  on  invoicing  are  those  of  the 
Member State of the customer, for a reverse charge supply, but for the tax control of 
the supplier, established in another Member States, different rules are applicable.  

3.1.4.  Chargeability on intra-Community transactions 

The  exchange  of  information  between  Member  States  about  intra-Community 
transactions  is  a  key  element  in  allowing  the  Member  State  of  purchase  to  detect 
relevant  supplies.  This  requires,  however,  that  Member  States  have  the  same 
interpretation  as  to  the  chargeability  of  the  VAT  for intra-Community  supplies  and 
acquisitions  of  goods  to  ensure  reporting  takes  place  in  both  Member  States  at  the 
same  time.  Different  opinions  lead  to  mismatches  reducing  the  usability  of  the 
information  collected.  Such  differences  undermine  the  utility  of  the  legislative 
proposal on reducing timeframes for the recapitulative statements and  VAT returns 
currently  being  discussed  in  the  Council.  The  Commission  therefore  will  present  a 
proposal in view of removing these differences. 

3.2.  Measures  enhancing  the  efficiency  of  Tax  Administration  with  a  view  to  the 

detection of VAT fraud 

The detection of cross-border VAT fraud in the European Union is largely dependant 
on  information  about  intra-Community  transactions.  This  information  is  submitted 
by traders and exchanged between the Member States according to the arrangements 
set  out  in  1993.  In  order  to  fight  against  fraud  efficiently  in  the  current  business 
environment, the timing, the available information, the targeting of the information, 
its quality and its treatment have to be enhanced.  

3.2.1.  Legislative  proposal  to  combat  tax  evasion  connected  to  intra  Community 

transactions: reducing timeframes 

In  accordance  with  the  Council's  conclusions  of  5  June  2007  the  Commission  has 
already presented in March 2008 a legislative proposal aimed at the reduction of the 
timeframes for both the reporting of intra-Community transactions by traders and the 
exchange of information between Tax Administrations8. The aim of this proposal is 
the ensure that Tax Authorities of the destination Member States are informed much 
quicker than today about intra-Community acquisitions taking place on their territory 
and therefore have the possibility to act at an earlier stage.  

8 

COM(2008)147 final, 17.3.2008 

EN 

6 

   EN 

 
                                                 
3.2.2.  Exemption of VAT at importation 

The  abuse  of  the  exemption  of  VAT  at  importation  where  followed  by  an  intra-
Community supply or transfer, has been identified as a weakness of the current rules 
in  detected  VAT  fraud  schemes.  Indeed,  neither  the  information  to  be  exchanged 
between the customs and Tax Administrations of the importing country are properly 
organised nor is relevant information efficiently transmitted to the following Member 
State. Therefore, the Commission will propose harmonised rules at Community level 
for the application of this exemption.  

3.2.3.  Enhancing cooperation between Member States  

The  Commission  is  currently  preparing  a  report  evaluating  the  functioning  of 
administrative cooperation. This will be the first report since the new Regulation for 
VAT administrative cooperation came into force in 2004.  

This report will concentrate on the elements which have been newly introduced with 
the  aim  of  improving  administrative  cooperation.  Where  information  is  of  major 
importance for an effective control in another Member State it should be exchanged 
automatically,  this  being  a  major  objective  of  the  2004  Regulation.  This  report 
provides an opportunity to review these elements and if necessary, to amend them in 
order to improve their effectiveness.  

In  addition  several  actions  have  been  undertaken  under  the  Fiscalis  program  to 
ensure exchange of best practice and cooperation in terms of control. In the area of 
auditing the Commission is working on the development and improvement of tools 
for e-auditing. The Commission also tries to encourage the Member States to make 
more  use  of  the  possibility  of  multilateral  controls,  supported  by  a  guide  that  was 
drafted to assist auditors and coordinators when using this control tool. Furthermore, 
project groups have been initiated to examine topics that are related to the quality of 
information  exchanged  between  Member  States,  to  share  best  practises  in  risk 
analysis  and  management  (also  supported  by  a  manual)  and  the  abuse  of  cash 
registers. Seminars and workshops have been organised to enable Member States to 
share experiences and knowledge in the field of combating VAT fraud.  

Administrative co-operation is indeed a key feature of the current VAT system which 
cannot be  managed by Member States in isolation. The Commission acknowledges 
that  such  co-operation  is  demanding  on  staff  resources  and,  consequently,  that  less 
demanding ways and best practices should be developed. .  

3.2.4.  Automated access to data 

The  Commission  would  like  to  highlight  that,  at  the  moment,  even  to  obtain  basic 
information  about  traders  established  in  other  Member  States,  requests  have  to  be 
sent to competent authorities of other Member States. In practice this process is time-
consuming  and  often  the  deadlines  for  replying  are  not  respected.  Therefore,  the 
Commission  will  propose  establishing  a  sound  legal  framework  for  allowing  a 
competent authority of one Member State to have automated access to specific data 
available in the database of another Member State which relates to the identification 
and activities of a taxable person. It is expected that on one hand such an automated 
access  will  reduce  the  number  of  requests  and  therefore  reduce  the  use  of  human 

EN 

7 

   EN 

 
resources and on the other hand will speed up the information exchange. Obviously, 
such  access  to  a  database  cannot  include  sensitive  information  e.g.  about  price 
practices etc. 

3.2.5.  EUROFISC 

Another promising approach is the creation of a European network, called Eurofisc, 
for closer operational cooperation between Member States in the fight against VAT 
fraud.  Eurofisc's  primary  tasks  would  be  to  provide  a  multilateral  early  warning 
mechanism  for  combating  VAT  fraud  that  can  hopefully  develop  to  some  kind  of 
common  risk  assessment  for  intra-Community  transactions,  to  coordinate  the 
exchange  of  information  and  the  work  of  participating  Member  States  in  acting  on 
warnings  received,  as  it  has  been  already  implemented  by  the  Eurocanet  network 
created  by 
the 
Commission/European Anti-Fraud Office. 

the  Belgian  Tax  Administration 

supported  by 

and 

The  Council  in  its  conclusions  of  7  October  20089  has  agreed  on  the  main 
characteristics  of  such  a  network.  The  Commission  is  participating  in  this  debate 
with great interest and is working on a proposal to create a sound legal base for such 
a network.  

3.3.  Measures enhancing Tax Administration capacity to collect and recover taxes 

The  Commission  will  propose  measures  to  enhance  the  possibilities  for  Tax 
Administrations  to  recover  VAT  losses  in  cross  border  cases.  Moreover,  it  will 
encourage Member States to take action at a judicial level against fraudsters on their 
territory whose intervention led to VAT losses in another Member State.  

3.3.1. 

Joint and several liability 

The  supplier's  obligation  to  report  his  intra-Community  transactions  is  designed  in 
order  to  provide  the  Member  State  of  the  customer  with  information  about  taxable 
transactions  on  its  territory.  Non-compliance  with  these  reporting  obligations 
deprives that Member State of information which could have led to the detection of a 
VAT fraud.  

It  should  be  noted  that  the  provision  for  joint  and  several  liability  already  exists  in 
the VAT Directive but so far its use by Member States has been limited to domestic 
transactions.  Therefore,  it  can  be  justified  to  consider  the  noncompliance  with  the 
reporting obligation in relation with cross-border transactions as a reason to hold the 
operator jointly and severally liable for tax losses occurred in the Member State that 
had  no  possibility  to  take  action  against  fraud  in  the  absence  of  the  relevant 
information.  

Such  an  approach  will  have  two  consequences.  It  should  lead  to  a  substantial 
increase in the quality of the reporting which is a key feature for control. Moreover, 
by  providing  this  additional  tool  to  tax  authorities,  the  setting  up  of  fraud  schemes 
becomes more complicated. 

9 

Council Conclusions 7 October 2008, 13784/08 (Presse 279) 

EN 

8 

   EN 

 
                                                 
3.3.2.  Recovery of taxes 

The  Commission  will  present  a  proposal  which  intends  to  improve  the  capacity  of 
Member  States  in  cross  border  collection  of  taxes.  Uniform  instruments  permitting 
enforcement or precautionary measures should reduce the administrative burden for 
the  authorities  concerned  and  allow  quicker  reactions  which  are  crucial  for  the 
success of such co-operation. 

3.3.3. 

Shared responsibility for the protection of all Member States revenues 

The ECOFIN Council of 4 December 2007 invited the Member states to put in place, 
at national level, appropriate legislation in order to ensure a comparable protection in 
terms  of  sanctions  and  criminal  proceedings  against  VAT  fraudsters,  regardless  of 
whether the committed fraud leads to losses of revenue on their own territory or on 
the territory of other Member States. 

A  number  of  Member  States  have  given  a  follow  up  to  this  invitation  and  started 
internal discussions on this issue. Other Member States did not take any action until 
now. 

The  Commission  insists  on  the  need  to  have  in  all  Member  States  appropriate 
protection of all VAT revenue independently of the Member State to which it is due. 
It will continue to monitor the follow up in the various Member States and will not 
hesitate to make necessary proposals in case a co-ordinated and voluntary action is 
not leading to appropriate results. 

3.4. 

A set of legislative proposals  

The  implementation  of  most  measures  set  out  above  requires  proposals  from  the 
Commission  for  which  the  European  Parliament  and  the  European  Economic  and 
Social Committee need to be consulted and for which a debate within the Council is 
needed for adoption by unanimity.  

Considering  the  variety  of  measures  needed  and  the  necessity  to  modify  several 
pieces  of  EU  legislation,  the  Commission  has  decided  to  present  these  measures  in 
three packages depending on the principal legal text that needs modification taking 
also  into  account  the  urgency  of  measures  and  the  advancement  of  the  preparatory 
works.  

As  already  mentioned  above,  a  first  legislative  proposal  was  presented  in  March 
2008  regarding  the  reduction  of  timeframes  in  order  to  speed  up  the  exchange  of 
information between Member States. 

The first set of upcoming proposals focuses on the collection and recovery of taxes in 
cross border situations10.  

A second package relates to the strengthening of administrative cooperation between 
Member  States.11  The  proposals  require  substantial  changes  to  the  existing 

10 

The proposed measure relate to "Joint and several liability" (par. 3.3.1), condition for VAT exemption 
at importation (par.3.2.2) and "Recovery of taxes" (par.3.3.2). 

EN 

9 

   EN 

 
                                                 
Regulation 1798/2003. Further changes may result from the report the Commission 
is due to make on the functioning of administrative cooperation. Since these changes 
are numerous and in order to improve the coherence in its legislative framework, the 
Commission  considers  it  more  appropriate  to  propose  a  complete  recast  of  the 
Regulation. 

The third package of legislative proposals will contain certain anti-fraud aspects, but 
will be aimed more generally at improving the functioning of the VAT system and in 
particular invoicing provisions. 

4. 

REFLECTIONS GOING BEYOND THE IMMEDIATE PROPOSALS 

Technological  developments  have,  in  recent  years,  altered  the  way  in  which 
businesses and Tax Administrations communicate. Most Member States allow, or in 
certain  cases  require,  declarative  obligations  to  be  fulfilled  by  electronic  means.  A 
number of Member States have made progress in the area of e-auditing, but legal as 
well as administrative barriers still obstruct its further development. These advances 
however  often  have  limited  impact  as  they  are  constrained  by  the  established 
traditional framework for the relationship between taxpayers and the tax authorities 
which  involves  reporting  at  regular  intervals  and  occasional  audits.  It  is  fair  to  say 
that generally the management of the VAT system in the EU has not kept pace with 
the developments in information technology. 

A  number  of  countries  outside  Europe  have  indeed  already  progressed  further  and 
have implemented procedures whereby information is exchanged - either in real time 
or  on  a  daily  basis  –  between  taxpayers  and  tax  authorities  thus  improving  control 
tools considerably. 

Certain  Member  States  are  exploring  new  ways  of  dealing  with  taxpayers  and  are 
having  discussions  with  businesses  about  compliance  and  monitoring  of  activities, 
with  the  aim  of  reducing  the  involvement  of  the  Tax  Authority  and  decreasing  the 
administrative  burden  for  businesses.  There  is  both  an  opportunity  to  build  on 
established models and the need to prevent a further complication for business as a 
result  of  VAT  requirements  becoming  more  and  more  divergent.  The  Commission 
would  therefore  strongly  suggest  to  Member  States  to  co-ordinate  their  IT 
developments. 

Although the management of the VAT system is primarily the responsibility of the 
Member  States,  it  is  in  the  interest  of  both  traders  and  tax  authorities  that  this 
reflection  is  carried  out  at  an  EU  level.  The  Commission  is  more  than  willing  to 
launch  and  coordinate  the  discussions  on  this  longer  term  approach.  It  would  be 
crucial for the success of such work to get all parties concerned actively involved in 
this process from the start and that everyone participates with an open mind.  

11 

The  proposed  measures  relate  to  "Automated  access  to  data  (par.  3.2.4),  "Confirmation  of  name  and 
address  of  taxpayers  in  VIES"  (par.  3.1.2),  "Common  minimum  standards  for  registration  and 
deregistration  in  VIES"  (par.  3.1.1),  "Shared  responsibility  for  the  protection  of  all  Member  States 
Revenues" (par. 3.3.3) and "EUROFISC" (par. 3.2.5). 

EN 

10 

   EN 

 
                                                                                                                                                         
The  Commission  would  therefore  suggest  creating  an  ad  hoc  group  involving  tax 
authorities and representatives of large as well as small and medium enterprises. The 
objective  of  this  ad  hoc  group  would  be  to  examine  how  the  use  of  IT  tools  could 
improve  the  relationship  between  taxpayers  and  tax  authorities  in  terms  of  VAT 
obligations, audit, and communication in general to their mutual benefit and to which 
extent  an  agreement  on  the  collection  of  core  data  would  be  feasible  – 
notwithstanding the possibility to ask for extra data when necessary. 

The exact mandate as well as the working methodology – use of subgroups working 
on  specific  themes  -  will  have  to  be  decided  at  a  later  stage  in  agreement  with  all 
parties  concerned.  What  is  important  at  this  stage  is  that  Member  States  as  well  as 
business representatives agree to put in the necessary expertise and resources in order 
to give this exercise a chance of success.  

This  need  for  a  longer  term  approach  will  be  one  of  the  topics  of  the  upcoming 
seminar organised by the Dutch tax authorities on VAT fraud planned for the end of 
January  2009.  It  will  provide  an  opportunity  for  Member  States,  representatives  of 
businesses and the Commission to have a first exchange of views on this issue. 

Moreover, this work is important in the context of the commitment of both Member 
States and Commission to reduce administrative burdens for business of which VAT 
constitutes a large part. 

5. 

CONCLUSION 

The  short  term  action  plan  set  out  above  is  the  concrete  result  of  two  years  of 
extensive  discussions  with  Member  States.  It  provides  a  global  approach  with  the 
aim  of  enhancing  the  tools  for  Tax  Administrations  for  tackling  VAT  fraud  at 
different stages in the process. 

The Commission will take its responsibility by submitting these legislative proposals 
in due time. It is conscious that a number of these proposals are quite substantial and 
touch  on  the  difficult  balance  between  burdens  on  business  and  effective  tax 
administration;  a  sensitive  issue  that  may  provoke  an  extensive  debate  when  the 
Commission tables its concrete proposals. 

Moreover, certain long established administrative practices will need to be changed 
and  Member  States  will  have  to  show  the  necessary  flexibility  and  willingness  to 
adapt. Certain measures such as the automated access to data will require significant 
work  at  a  technical  level  for  which  Member  States  must  be  prepared  to  put  the 
necessary resources.  

When  looking  at  each  of  the  abovementioned  measures  separately,  it  is  clear  that 
none  of  them  represents  the  "one"  single  and  global  solution  for  eliminating  VAT 
fraud. 

Each individual measure should bring added value but it is only their implementation 
as  a  whole  which  will  provide  to  the  tax  authorities  an  adequate  framework  for 
combating VAT fraud. 

EN 

11 

   EN 

 
The success of the anti-fraud strategy at EU level will finally depend on what will be 
adopted by the Council and how quickly these measures afterwards will be put into 
practice. The main responsibility will therefore lie in the hands of the Member States. 

Nevertheless,  the  Commission  does  not  consider  this  action  programme  to  be  the 
final  product  but  sees  it  as  a  first  major  step  in  a  coordinated  approach  to  tackling 
VAT  fraud  in  the  EU.  In  the  view  of  the  Commission,  these  efforts  have  to  be 
continued  and  it  calls  upon  all  other  parties  concerned  to  continue  participating  in 
this exercise as actively as they have done until now. 

EN 

12 

   EN 

 
Annex 1: Legislative proposals 

Proposal presented in March 2008 

Measure 

Necessary changes in legislation

Reducing timeframes (3.2.1.) 

VAT Directive 2006/112/EC and 
Regulation 1798/2003 

A first set of proposals 

Measures 

Necessary changes in legislation

Joint and Several Liability (3.3.1.) 

Fixing the conditions for the VAT exemption 
at importation (3.2.2.) 

VAT Directive 2006/112/EC and 
potentially an Implementing 
Regulation 

VAT Directive 2006/112/EC and 
potentially an Implementing 
Regulation 

Mutual assistance in Recovery (3.3.2.) 

New Regulation 

A second set of proposals. 

Measures 

Necessary changes in legislation

Automated access to data (3.2.4.) 

Recast of Regulation 1798/2003 

Confirmation of name and address of taxpayers 
in VIES (3.1.2.) 

Recast of Regulation 1798/2003 

Common minimum standards for registration 
and deregistration in VIES (3.1.1.) 

Shared responsibility for the protection of all 
Member States Revenues (3.3.3.) 

Recast of Regulation 1798/2003 
and potentially an Implementing 
Regulation 

Recast of Regulation 1798/2003  

EUROFISC (3.2.5.) 

Recast of Regulation 1798/2003  

A third set of proposals. 

Measures 

Necessary changes in legislation

EN 

13 

   EN 

 
 
 
 
 
Invoicing rules (3.1.3.) 

VAT Directive 2006/112/EC 

Chargeability on Intra-Community transactions 
(3.1.4.) 

VAT Directive 2006/112/EC 

EN 

14 

   EN