COMMISSION STAFF WORKING PAPER EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT
Date: 2011-11-09
Institutions: European Commission
Subjects: action programme, common tariff policy, fiscal policy, single market, tax evasion

EUROPEAN COMMISSION 

Brussels, 9.11.2011 
SEC(2011) 1318 final 

COMMISSION STAFF WORKING PAPER 

EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a 
REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

establishing an action programme for customs and taxation in the European Union for 
the period 2014-2020 (FISCUS) and repealing Decisions N°1482/2007/EC and 
N°624/2007/EC 

{COM(2011) 706 final} 
{SEC(2011) 1317 final} 

 
 
 
 
  
 
 
PART I: CUSTOMS SECTOR 

1. 

PROBLEM DEFINITION 

The  world  economy  is  characterised  by  change,  which  leads  to  the  emergence  of  new 
problems for customs authorities. The customs union and its supporting instruments need to 
adapt to these changes.  

Problem  1:  Pressure  on  customs  authorities  to  process  growing  volumes  of  trade,  and 
difficulty to apply measures to balance facilitation and control 

International  trade  returned  to  pre-recession  levels  by  mid-year  2010  and  is  expected  to 
continue growing. This is reflected in a clear growth in the numbers of consignments and 
customs declarations. 

Due  to  globalisation  the  EU  is  relying  on  the  rest  of  the  world  for  more  and  more  of  its 
production  inputs.  New  business  models,  such  as  e-Commerce  and  e-business,  change  the 
nature  of  trade  and  increase  the  complexity  of  business.  These  changes  require  appropriate 
customs control measures.  

Problem 2: Gap in skills, competencies, resources as well as experience and best working 
practices  

Customs  authorities  are  in  the  frontline  for  the  protection  of  life,  health  and  the 
environment.  The  number  and  the  importance  of  such  measures  increased  requiring  the 
customs authorities to perform additional specialised tasks.  

Public demand for security  also  multiplied. Specific policies for internal security result in a 
considerable  safety  and  security  agenda  for  customs  to  implement.  Customs  face  the 
complexity  of  working  together  with  many  other  authorities  and  bodies  and  the  pressure  to 
acquire and use specialised technical equipment.  

Currently,  in  both  mentioned  areas,  customs  authorities  often  lack  the  skills,  resources  and 
experience to achieve this efficiently.  

Problem 3: Incoherent and inefficient application of EU policies in the context of safety 
and security 

In  light  of  the  ongoing  modernisation,  the  customs  authorities  are  responsible  for  the 
implementation  of  EU  legislation  in  the  field  of  safety  and  security  which  is  not  always 
directly compatible with existing processes and procedures. This makes the implementation 
difficult and results in incoherent and inefficient practices.  

Problem  4:  Shortcomings  in  the  uniform  implementation  of  EU  law  by  the  27  EU 
customs authorities 

The  uniform  implementation  of  customs  legislation  and  working  methods  has  been 
difficult.  The  existence  of  27  separate  processes  and  procedures  is  often  inefficient  and 
distorts competition. This undermines the financial interests of the Union and hinders the 
protection  of  the  society.  A  legislative  response  to  these  issues  was  the  adoption  of  a 

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Modernised  Community  Customs  Code1  and  a  Decision  on  implementation  of  Electronic 
Customs2 in 2008. 

Problem 5: Difficulties in uniform implementation of interconnected IT systems 

Despite the fact that the Member State administrations have access to a European wide secure 
network  (CCN/CSI3)  supporting  the  key  ‘e-customs’  systems,  the  Customs  Union  faces 
problems of interoperability  and excessive complexity. The businesses have to connect to 
multiple systems in the Member States where the customs activities take place. This increases 
the  administrative  burden  and  compliance  costs.  Exchange  of  information  with  third 
countries also requires development of secure, consistent, and EU-wide IT solutions.  

Problem  6:  Heavier  and  increasingly  unsustainable  burden  for  some  EU  customs 
authorities to implement policies in the interest of the union 

Member  States  face  different  levels  of  burden  in  terms  of  control  activities  for  safety  and 
security.  The  imbalance  is  particularly  heavy  in  terms  of  investment  in  infrastructure 
capacity building and technology.  

2. 

OBJECTIVES 

General Objective: to support EU customs by increasing cooperation between participating 
countries, their customs administrations, their officials and other relevant stakeholders. 

Specific Objectives will be:  

1. 

2. 

3. 

4. 

to support EU Customs in its role in facilitating legitimate trade by automating and 
speeding up customs processes (related to problem 1, 3, 4, 5) 

to  support  EU  customs  in  strengthening  the  competitiveness  of  European  business 
and the protection of citizens' safety and security, as well as the environment (related 
to problem 2, 3, 4, 5, 6) 

to  support  EU  customs  in  protecting  the  financial  and  economic  interest  of  the  EU 
and the Member States (Related to problem 4, 5, 6) 

to support the preparation, implementation and application of EU law and initiatives 
with view of strengthening the EU customs in terms of efficiency, effectiveness and 
uniformity. (related to problem 1, 2, 3, 4, 5, 6) 

Operational objectives will be: 

1. 

2. 

1 
2 

3 

to  identify,  develop  and  apply  best  working  practices  in  all  areas  of  customs 
processes 

to support a pan-European electronic customs environment 

Regulation No 450/2008/EC of 23 April 2008 — OJ L145, 4 June 2008 
Decision  No  70/2008/EC  of  the  European  Parliament  and  of  the  Council  of  15  January  2008  on  a 
paperless environment for customs and trade 
CCN/CSI = Common Communication Network, Common System Interface 

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3. 

4. 

5. 

6. 

7. 

8. 

9. 

to share information and expertise to support the organisation of customs controls 

to boost customs cooperation within the EU and in relation to third countries as well 
as cooperation between customs and other government authorities and third parties 

to set up joint activities/teams to perform specific operational tasks together  

to support the modernisation process of the EU Customs Union in a harmonised way  

to sustain and monitor correct understanding and harmonised application of EU law 
and policies 

to reinforce skills and competencies 

to ensure appropriate allocation of infrastructure in view of surveillance and control 
responsibilities 

2.1. 

Necessity of EU intervention 

With  the  customs  union  being  an  exclusive  competence  of  the  EU,  the  Member  States  ipso 
facto agreed that actions in the customs area will be better implemented at the EU level. The 
EU legal framework alone does not ensure sufficiently the proper functioning of the Customs 
Union. Supporting measures as provided by the Customs Programme secure that the EU 
customs legislation is applied in a convergent and harmonised way. Also, many activities 
in  the  customs  area  are  of  a  cross-border  nature,  and  therefore  they  cannot  be  effectively 
and efficiently delivered by individual Member States.  

Solidarity  and  responsibility  sharing  are  the  core  principles  underlying  funding  for  the 
Customs Union. The EU intervention is required to preserve the EU public good where EU 
'demand' (e.g. for security) cannot be adequately serviced by the 'supply' of particular Member 
State. The EU action translates in the joint funding of technical capacity building.  

2.2. 

EU Added Value  

Builpding  further  upon  the  strengths  of  the  Customs  2013  Programme,  the  main  EU  added 
value of the Customs 2020 Programme initiative lies in the provision of concrete results with 
an  Europe-wide  impact  that  could  have  not  be  produced  as  effectively  and  efficiently  by 
individual Member States. The programme will: 

(a) 

(b) 

boost the effectiveness of the Member States’ customs administrations’ operational 
work and provide economies of scale, 

enable  the  effective  and  uniform  functioning  of  the  EU  Customs  Union  in  the 
form of networks, synergies in best practices, pooling of resources and platforms to 
develop collaboration and trust among administrations.  

The EU is therefore better placed to act for boosting the customs union policy. 

3. 

POLICY OPTIONS 

Five options have been analysed in the impact assessment. 

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3.1. 

Option 1: Baseline Scenario - " Status Quo" 

The baseline scenario is the continuation of the Customs 2013 Programme with no changes in 
financing,  objectives  or  available  instruments.  In  this  scenario,  the  programme  will  support 
the same activities and tools as in the past. 

3.2. 

Option  2:  Increased  support  to  EU  legal  obligations  such  as  the  Modernised 
Customs Code (MCC)  

This option is based on the baseline scenario and addresses the new needs deriving from the 
evolving  EU  customs  environment.  The  option  implies  a  stronger  focus  on  the  achieving 
operational objectives 2, 4, 5, 6 and 8. 

The option assumes the continuation of existing European Information Systems and deploying 
new  ones  as  defined  in  the  EU  customs  legislation  through  gradual  introduction  of  a  more 
shared  IT  development  model  and  modernisation  of  the  governance,  architecture  and 
technology. 

The  option  adds  innovative  joint  action  tools  to  better  meet  the  objectives.  More 
streamlined  cooperation  is  envisaged  within  the  EU  and  with  international  actors  through 
reinforcement  of  common  training  and  setting  up  of  EU  expert  teams.  It  supports  joint 
activities between customs and other authorities to reinforce common risk management in 
non-fiscal areas.  

Policy  option  2  will  have  greater  impacts  in  terms  of  supporting  all  specified  objectives 
compared  to  option  1,  since  it  includes  provision  for  increased  cooperation  (IT  and 
human).  

3.3. 

Option 3: Option 2 with financial support for technical capacity building  

This option adds to option 2 a financial support scheme allowing Member States to request 
support for the acquisition of any type of equipment to support control activities to meet the 
demands for speeding up and streamlining controls in a context of evolving technologies. The 
option implies a significant budget increase in comparison to option 2.  

3.4. 

Option 4: Option 2 with a maximised shared IT environment 

This option proposes higher scale shared development and operation of trans-European IT 
systems.  It  will  support  the  public  authorities  to  develop  and  deploy  the  systems  for  a  pan-
European electronic customs environment and businesses to connect to those systems.  

Compared to option 2, option 4 allows customs to extend the capability of sharing common 
developments  in  all  areas  of  its  business.  This  option  would  address  the  problems  of 
implementing interconnected IT systems to speed up customs procedures more adequately. 

3.5. 

Option 5: Discontinuation of the programme 

This option envisages the discontinuation of the Customs Programme, meaning not to provide 
funding for operating existing or new trans-European IT systems neither for joint actions and 
common training activities. 

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4. 

ASSESSMENT OF IMPACTS 

The benchmark for the impact assessment is the baseline scenario. The primary effect of any 
of the options relates to the functioning of public authorities but secondary effects on business 
and consumers are also identified. 

4.1. 

Option 1: Baseline Scenario - " Status Quo" 

In  this  scenario,  the  agility  of  the  Customs  Union  facing  the  new  problems  and  new 
implementation  requirements  for  upcoming  EU  legislation  is  limited  and  leads  to  severe 
shortcomings.  

Without a refocus of the objectives, an additional set of new tools and increased funding, 
the Customs Programme will no longer provide an adequate response to the problems 
lying ahead. 

The new evolving policy context and the current weaknesses in interpretation of EU law and 
in its implementation as well as the issue of non-harmonised procedures are likely to remain 
inadequately tackled in the baseline scenario.  

The  baseline  scenario  does  NOT  enable  an  efficient  IT  approach,  nor  enhanced  customs 
cooperation and pooling of resources, expertise and skills to support Member States in their 
operational tasks.  

The problems customs faces, are likely to become aggravated in a status quo continuation of 
the programme. This would impact the EU budget (economic impact) and seriously affect the 
security and safety of the EU, its citizens and the environment. 

4.2. 

Option  2:  Increased  support  to  EU  legal  obligations  such  as  the  Modernised 
Customs Code (MCC)  

This option will support the Member States' customs authorities to protect the financial and 
economic interests of the EU and Member States through enhanced customs cooperation. 
The effective collection of the customs duties will directly influence the EU Budget and the 
national  budgets.  Indirectly,  this  will  influence  the  income  distribution  as  well  as  the 
production of public goods.  

The  economies  of  scale  derived  from  the  upgraded  shared  development  approach  for  the 
TEIT  systems  will  reduce  the  costs  for  Member  States'  governments.  The  impacts  of  a 
shared IT development approach are also to be sought in the harmonisation of the interface 
to traders. Legitimate trade will be facilitated through the speeding up of automated customs 
procedures and control measures. The resulting reduction in administrative burden will have a 
spill-over effect on costs for economic operators and consumers. Strengthened cooperation 
will contribute to a better protection of the financial interests4. 

Reinforced cooperation among customs and with other authorities will support the effective, 
efficient  and  uniform  implementation  of  legislation,  for  instance  on  the  safety  of  the 
products imported into the EU or on IPR. More streamlined cooperation will avoid gaps in the 
protection  of  the  supply  chain.  Developing  joint  priority  control  areas  will  support  the 

4 

Thematic Report of the Directorate-general for Budget on customs control strategy in Member States in 
view of the Control of traditional own resources.  

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proper  management  of  the  EU  border,  assisting  the  protection  of  citizens  and  the 
environment from risks posed by international trade. 

Customs  authorities  would  be  more  effective  in  implementing  Customs  action  and  EU 
cooperation in the areas of environmental crime, illegal movements of waste, chemicals or 
animal and plant health legislation. 

4.3. 

Option 3: Option 2 with financial support for technical capacity building  

The enhanced technical capacities of Member States will lead to improved non-fiscal controls 
and  thus  a  better  protection  of  EU  citizens  in  terms  of  product  safety  and  health.  This 
option will further enhance the protection of the financial and economic interests of the 
EU and Member States, reducing the competition distortion for businesses allowing faster 
and more streamlined control of merchandise across the EU.  

Distributional  impact  for  the  support  to  control  equipment  is  relevant  because  Member 
States located at the external EU-border face higher investments than the others.  

4.4. 

Option 4: Option 2 with a maximised shared IT environment 

This option will lead to the largest economies of scale as IT resources will be used in a fully 
integrated way. For Member States making use of the common systems, the effort reduction 
will be between 60% and 80% for the system updates and 30% for the supporting system. The 
Member States who choose not to use the common systems will have no effort reduction on 
systems updates but do have 30% effort reduction on the supporting system5. 

The  introduction  of  innovative  technologies  will  reduce  the  costs  of  businesses.  More 
Member  States  working  with  the  same  IT  applications  will  lead  to  more  harmonised 
customs processes and bring direct benefits to economic operators. 

Under this option, the new IT environment will result in a full service to customs authorities 
and business.  

4.5. 

Option 5: Discontinuation of the programme 

This  option  will  negatively  impact  the  customs  administrations  in  their  responsibility  to 
implement EU legislation in the domain of customs.  

It  will  reduce  the  ability  to  prevent  and  detect  fraud,  which  will  deteriorate  further  over 
time. EU and Member States will suffer a loss in the collection of EU duties and charges.  

It  is  likely  that  there  will  be  greater  divergence  in  interpretation  of  customs  law  without 
sharing best practices, common training or guidelines and exchange of digitised information. 
This will lead to divergent treatment of traders and insufficient fight against illegitimate 
trade causing negative impacts on competitiveness, growth and jobs. 

The consumers and citizens within the EU will be less protected against safety and security 
risks. The standard of controls will become variable; the opportunities for “shopping” for the 
best to or exit point from the EU will increase. The ability to fight criminal activities will be 
impaired.  

5 

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MCC and eCustoms Master IT Plan Iteration 1 Global Estimation Study Document, p 53 

6 

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5. 

COMPARE THE OPTIONS 

Option  2  is  the  preferred  option  and  fits  in  the  envelope  foreseen  in  the  next  Multi-Annual 
Financial Framework6. 

Criteria 

Effectiveness in achieving objectives and impacts 

Efficiency 

1
e
v
i
t
c
e
j
b
O

0 

+ 

+ 

+ 

2
e
v
i
t
c
e
j
b
O

0 

++ 
(innovative= 
new IT 
systems + 
shared 
development) 

++ 
(as in option 
2) 

+++ 
(as in option 
2 + full scale 
sharing) 

3
e
v
i
t
c
e
j
b
O

0 

4
e
v
i
t
c
e
j
b
O

0 

+ 

++ 

+ 

++ 

+ 

++ 

5
e
v
i
t
c
e
j
b
O

0 

+++  
(innovative 
= EU 
expert 
teams 

+++ 
(as in 
option 2)  

+++ 
(as in 
option 2) 

y
t
i
r
a
d
i
l
o
s
/
s
n
i
a
g

y
c
n
e
i
c
i
f
f
E

n
o
i
t
a
t
n
e
i
r
o

t
u
p
t
u
O

0 

0 

9
e
v
i
t
c
e
j
b
O

0 

0 

+++ 

++ 

6
e
v
i
t
c
e
j
b
O

0 

7
e
v
i
t
c
e
j
b
O

0 

+ 

+ 

8
e
v
i
t
c
e
j
b
O

0 

+++ 
(innovative
= 
reinforced 
training) 

+ 

+ 

+++ 
(as in 
option 2) 

+++ 
(new) 

+++ 

+++ 

+ 

+ 

+++ 
(as in 
option 2) 

0 

+++ 

+++ 

--- 

--- 

--- 

--- 

--- 

--- 

--- 

--- 

0 

NA 

LOW 

Option 1 
Baseline scenario 

Option 2 
Increased support 
to EU legal 
obligations such as 
the MCC 

Option 3 
Option 2 plus 
Technical capacity 
building 

Option 4 
Option 2 plus a 
maximised shared 
IT environment 

Option 5 
No programme 

6 

COM(2011)500 of 29 June 2011, A budget for Europe 2020 

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PART II: FISCALIS SECTOR 

1. 

PROBLEM DEFINITION 

National  tax  authorities  are  becoming  more  and  more  the  "victim"  of  the  success  of  the 
European integration process: successive enlargements, Single Market establishment and the 
creation  of  a  single  European  currency  in  the Eurozone  have  significantly  reduced  previous 
risks to and costs of economic cross-border transactions. Thus, divergences in tax  regimes 
have become more important in relative terms. 

Along with exponential growth in cross-border transactions, the successive enlargements 
of the EU and the increasingly complex national tax rules in the 27 jurisdictions make it 
more  challenging  to  deal  efficiently  and  effectively  with  cross-border  transactions  that  give 
rise  to  the  application  of  tax  legislation.  (Problem  1:  Divergent  application  and 
implementation of EU tax law) 

Combating cross-border fraud still remains a major area of concern despite recent successes. 
It  is  generally  accepted  that  fraud  levels  would  rapidly  increase  if  no  coordinated  action 
would  be  undertaken  by  the  tax  authorities.  (Problem  2:  Inadequate  response  to  tax  fraud, 
avoidance and evasion) 

Information  on  taxable  goods  within  the  EU  territory  cannot  come  from  controls  at  internal 
borders  anymore.  Thus  national  tax  authorities  rely  on  an  EU-wide  secured  information 
network for exchanging information, which is expected to grow further due to increased trade 
flows  and  legislative  changes,  not  only  within  the  internal  market,  but  also  with  third 
countries.  (Problem  3:  Pressure  on  national  tax  administrations  to  exchange  increasing 
quantities of data and information in a secure and rapid way.) 

An  effective  tax  system  should  ensure  sustainable  revenues  while  not  adversely  affecting 
growth  and  jobs.  At  present,  too  many  tax  obstacles  make  cross-border  activities  more 
complicated,  while  citizens  face  difficulties  in  obtaining  information  or  claiming  tax  reliefs 
from foreign tax administrations7. (Problem 4: High administrative burden for taxpayers and 
tax administrations) 

Technical  progress  has  dramatically  changed  the  technologies  underlying  cross-border 
transactions. However, technical progress in public administrations is typically much slower 
than in the private sector. This changing tax environment increases the need for effective and 
efficient e-government services. (Problem 5: Slower technical progress in the public sector) 

2. 

OBJECTIVES 

In  view  of  the  problems  identified  for  the  upcoming  decade,  the  existing  objectives  of  the 
Fiscalis  2013  programme  remain  valid,  but  have  to  be  refocused  on  fighting  fraud  and 
adapting to the changing tax environment. Moreover, two new objectives need to be added to 
the  new  programme:  reducing  administrative  burden  on  tax  administrations  and  taxpayers 
(both  individuals  and  business)  and  enhancing  cooperation  with  third  countries  and  third 
parties. 

7 

Communication on removing cross-border tax obstacles for citizens; COM(2010) 769 

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The  general  objective  of  the  programme  will  be  to  improve  the  proper  functioning  of  the 
taxation  systems  in  the  Internal  Market  by  increasing  cooperation  and  support  to  EU  tax 
policy between Participating Countries, their tax administrations, and relevant stakeholders. 

The specific objectives (SO) will be: 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

Facilitate a coherent application and implementation of EU tax law 

Provide  a  framework  for  cooperation  enhancing  coordination  and  coherence  of  EU 
tax policy application and implementation 

Enhance effective and efficient information exchange and administrative cooperation 

Contribute  to  the  reduction  of  administrative  burden  on  tax  administrations  and 
taxpayers 

Enhance cooperation with third countries and third parties 

To  strengthen  the  administrative  capacity  of  tax  administrations  and  increase  their 
efficiency 

Necessity of EU intervention 

Tax  policies  remain  predominantly  a  nationally  reserved  policy  area.  The  proposed 
programme however cannot be considered to be a tax policy measure falling under national 
competences. The programme aims to improve cooperation between tax administrations and 
provide tools for improving cooperation and achieving the objectives. The proposed measure 
is therefore a clear Internal Market support measure, under Article 114 of the TFEU, allowing 
improvement in functioning of the various tax systems within the Internal Market. 

Action at EU level rather than at national level is necessary for the following reasons: 

– 

– 

It is not sufficient to adopt legislation at European level, taking it for granted that its 
implementation  will  run  smoothly  and  if  not,  the  infringement  procedure  will  be 
sufficient. In order to efficiently implement EU and national tax law, cooperation and 
coordination  at  the  European  level  are  necessary.  Through  the  different  Fiscalis 
programmes, the Commission and Member States have built a strong relationship of 
trust to provide this guidance and steering.  

The challenges identified cannot be tackled without a steering role executed by the 
Commission and without encouraging Member states to look beyond the borders of 
their administrative territory.  

2.1. 

EU Value Added 

From an economic point of view, action at EU level is much more efficient. Interconnecting 
national  customs  and  tax  administrations  in  approximately  5 000  connection  points  ensures 
that  national  administrations  only  need  to  connect  once,  and  not  26  times,  to  exchange 
information with each other.  

Other  cornerstones  are  activities  that  bring  taxation  officials  together  to  exchange  best 
practices  and  learn  from  each  other.  It  is  more  efficient  to  have,  under  the  programme 

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umbrella, the Commission is acting as activity broker between the participating countries to 
allow synergies between activities, ensuring that Member States do not need to develop their 
own set of tools and ways of work and not losing the systematic implementation at EU level..  

Stakeholders  of  the  programme  have  confirmed  that  most  activities  that  were  necessary  to 
achieve progress in taxation cooperation would not have happened at all, or would have only 
happened much later and/or at a higher cost and with less optimal results if the cooperation 
framework of the programme had not existed.8  

3. 

DESCRIPTION OF POLICY OPTIONS 

Considering the overall policy context and the problems ahead of taxation policy in the next 
decade, a number of alternative policy options have been considered.  

3.1. 

Option 1 – Baseline Scenario: "Status Quo" 

The baseline scenario of this impact assessment will be the continuation of the Fiscalis 2013 
programme  without  any  changes  in  terms  of  financing,  objectives  or  instruments.  In  this 
option,  the  Fiscalis  programme  would  not  be  adapted  to  the  changing  economic  and 
technological environment and would not provide for an additional focus on the fight against 
fraud, reduction of administrative burden for business and tax administrations and enhanced 
cooperation with third countries and parties.  

With constant budget, this option will only ensure the business continuity of the IT systems 
that will be available by 2013. This option will have to choose priorities among the issues that 
need to be tackled. The baseline scenario will not introduce the suggestions for improvement 
raised in the midterm evaluation9.  

3.2. 

Option 2 – Upgrade the baseline scenario 

This  option  will  be  the  continuation  of  the  baseline  scenario  but  will  tailor  the  specific 
objectives  to  allow  the  programme  to  address  all  the  challenges  identified  in  the  problem 
description.  

This  policy  option  will  have  only  a  marginally  higher  budget.  This  implies  that  this  option 
will have to choose priorities among the issues that will be tackled and will only support the 
taxation administrations within the current policy context. Any new policy initiatives will fall 
outside  the  scope  of  this  option.  Exception  could  be  made  for  those  initiatives  that  have  a 
marginal  budgetary  impact,  meaning  the  programme  could  limit  its  support  to  a  very  low 
number of joint actions. This option will introduce the suggestions for improvement raised10 
by the stakeholders because of their low budgetary impact.  

3.3. 

Option 3 – Upgrade and cater for new policies 

Policy option 3 will provide taxation with a solid framework to address the challenges of the 
next decade. Besides addressing option 2, this policy option will extend cooperation to new 
areas stemming from policy evolvement. This policy option will have a substantially higher 
budget compared to the present programme. This option will ensure both business continuity 

8 
9 
10 

RAMBOLL, Fiscalis 2013 midterm evaluation, paragraphs 396-424 
RAMBOLL, Fiscalis 2013 midterm Evaluation, paragraphs 268-328 
Ibid, paragraphs 268-328 

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of  the  IT  systems  and  the  entry  in  operation  of  any  IT  system  required  by  new  legal 
initiatives. 

3.4. 

Option 4 – No continuation of the programme 

This  policy  option  envisages  the  discontinuation  of  the  Fiscalis  programme.  No  successor 
would  be  launched  in  2014  and  there  will  be  no  funding  to  support  the  existing  trans-
European IT systems, set up joint actions or training activities to support the functioning of 
taxation systems in the EU.  

4. 

ASSESSMENT OF IMPACTS 

The  assessment  criteria  used  were:  effectiveness,  efficiency  and  coherence  with  other  EU 
initiatives,  complemented  by  the  acceptability  of  each  option  for  Member  States,  as  policy 
options have direct impact on taxation authorities in participating countries. Indirect impacts 
are also identified.  

Given  the  nature  of  the  options,  no  direct  environmental  impacts  are  expected.  Indirect 
environmental  impacts  concern  the  reduction  of  paper  based  information  and  energy 
consumption. The impact on SMEs relates to the creation of a situation allowing reduction of 
administrative burden on business and is as such also of an indirect nature and influenced by 
other triggers.  

The  social  impact  is  also  indirect  as  the  programme  creates  the  framework  to  support  tax 
administrations  to  improve  tax  collection,  leading  indirectly  to  a  better  income  distribution. 
However,  also  in  this  respect,  the  programme  is  only  one  of  the  triggers  to  generate  this 
impact. 

4.1. 

Option 1: Baseline Scenario 

This  policy  option  will  not  be  able  to  address  all  challenges  facing  the  tax 
administrations,  and  will  not  provide  the  means  to  upgrade  the  cooperation  and  exchange 
best practices amongst tax administrations compared with today.  

The  baseline  scenario  will  not  alter  any  of  the  shortcomings  regarding  Member  States' 
differences in using taxation IT systems, higher tax collection costs, or higher administrative 
burden on taxpayers11.  

Due  to  the  lack  of  budget  increase,  the  baseline  scenario  only  supports  the  taxation 
administrations within the current policy context. Under this option, choice between priorities 
to be tackled must be done and any new policy initiatives fall outside the scope of the option.  

The option will only ensure the business continuity the IT systems that will be available by 
2013,  and  will  not  reduce  the  differences  in  using  taxation  IT  systems  namely  the  different 
interfaces with the final users of the systems and the different implementations of the systems.  

This option will not introduce suggestions from the Midterm Evaluation12, such as reinforcing 
cooperation  in  a  more  systematic  way,  and  will  not  optimise  the  use  of  experts  at 
operational level in Member States.13. 

11   RAMBOLL, Fiscalis 2013 midterm evaluation, paragraph 359. 

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4.2. 

Option 2: Upgrade the baseline scenario 

Combining  efficiency  improvements  with  widened  objectives,  this  option  will  give  new 
impetus  to  tax  cooperation  in  the  next  decade  and  support  an  integrated  coordination  and 
coherence of tax policy implementation. The changes in the instruments and the enlarged set 
of objectives will allow the tax administration to face adequately the challenges identified in 
the problem definition.  

This  policy  option  will  tailor  the  objectives  to  the  needs  by  focusing  on  the  changing  tax 
environment,  reduction  of  administrative  burden  on  tax  administrations  and  taxpayers14 
and enhanced cooperation with third countries and third parties.  By building further on 
experience of VIES on the web, the option will provide means to contribute to the reduction 
of  administrative  burden  on  taxpayers  and  of  the  costs  of  tax  collection  for  tax 
administrations. 

The  fight  against  fraud  will  be  strengthened  by  providing  a  framework  for  enhancing 
coordination and coherence of EU tax policy application and implementation. This will build 
for instance on the experiences gained with Eurofisc, which could lead to new working fields 
for controls.  

Like the baseline option, option 2 will only have the budgetary means to support the taxation 
administrations within the current policy context. Any new policy initiatives will fall outside 
the scope of this option. 

The continuity of the existing IT systems will be secured and allow some – albeit not major - 
technology alignments. It provides room to develop common specifications and offer shared 
services to shortened deployment time. The entry in operation of any new IT system required 
by policy evolution and involving significant expenditure will be either lengthened by several 
years or not supported.  

4.3. 

Option 3 – Upgrade and cater for new policy needs 

This  policy  option  will  give  the  tax  administrations  in  the  EU  full  scope  to  cooperate  to 
improve  the  functioning  of  the  taxation  systems  in  the  internal  market  and  support  EU  tax 
policy  developments.  This  option  introduces  the  necessary  efficiency  improvements  and 
addresses  all  the  objectives  without  the  need  to  prioritise  and  provide  scope  to  include  new 
areas for cooperation, at a wider scale in a shorter time period. New IT systems required by 
policy evolution may be developed if required within the required time period. Based on the 
experience  with  the  previous  programmes,  such  implementation  would  require  a  substantial 
budgetary  increase  compared  to  the  baseline  scenario.  Taking  into  account  the  present 
economical difficulties, constraints on budgets and unambiguous signals from some Member 
States;  the  acceptability  of  the  option  is  rated  low.  This  option  equally  falls  outside  the 
provisions made in the Budget for Europe 202015. 

12 

13 
14 
15 

During  the  midterm  evaluation,  the  roundtable  Fiscalis  2013  Committee  meeting  and  the  June 
workshop 
DELOITTE, Alternatives for taxation cooperation, p. 39. 
Ibid, p. 17-18 
COM(2011) 500 of 29 June 2011. 

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4.4. 

Option 4 – No continuation of the programme 

In this scenario the programme will be discontinued and no EU funding will be provided for 
IT tools, joint actions or training activities. Taxation cooperation will be seriously hampered 
and  will  therefore  have  a  serious  negative  impact  on  the  efficiency  and  effectiveness  of 
taxation cooperation. Member States may have to look for alternative ways to substitute the 
cooperation  driven  by  the  programme.16  Digitised  information  exchange  between  tax 
authorities  will  become  more  cumbersome  and  costly.  Without  joint  actions,  exchange  of 
good  practices  is  expected  to  become  more  fragmented  and  more  costly,  and  lack  of 
coordinated  training  programmes  will  lead  to  duplication  of  efforts.  It  is  expected  that  the 
current  differences  in  efficiency  and  effectiveness  of  tax  activities  between  Member  States 
will increase. 

4.5. 

Economic Impacts of the programme 

The  programme  has  a  positive  economic  impact  as  it  supports  activities  that  pursue  the 
reduction of administrative burdens. Already in the baseline option, automation has a positive 
impact.  This  impact  will  be  strengthened  in  option  2  and  3  where  the  contribution  to  the 
reduction of administrative burden is an explicitly mentioned.  

The programme provides a framework for tax administrations to perform better tax collection 
and reduces tax fraud and evasion, leading to better services and lower compliance costs, but 
also  enhance  efficiency  of  tax  administrations  and  increase  revenues17.  This  impact  is 
expected to be reinforced with focus on fight against fraud under option 2 and 3. By reducing 
the divergence in interpretations of tax law, the programme decreases unfair competition and 
possibly unjustified double taxation faced by taxpayers. 

4.6. 

Preferred option 

The  impacts  of  the  different  options,  selected  in  terms  of  effectiveness,  efficiency  and 
acceptability  are  summarized  in  Table  1.  The  impact  assessment  leads  to  the  following 
recommendation: 

The preferred option is policy option 2: Upgrade the baseline scenario 

Option 2 is preferred despite a lower score on effectiveness, but has much higher acceptability 
by  Member  States.  The  option  fits  in  the  envelope  foreseen  in  the  next  Multi-Annual 
Financial Framework18. 

16 
17 
18 

DELOITTE, Analysis of different scenarios for tax cooperation, p. 47-52 
DELOITTE, Alternatives for taxation cooperation, p 21-22. 
COM(2011) 500 of 29 June 2011, "A budget for Europe 2020". 

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Table 1: Summary comparison of options 

Criteria 

Effectiveness and relevance 

Efficiency 

Coherence 

Other  Overall Assessment 

1
O
S

0 

2
O
S

0 

3
O
S

0 

4
O
S

0 

5
O
S

0 

6
O
S

0 

s
e
i
c
i
l
o
P
e
r
u
t
u
F

0 

n
o
i
t
a
t
n
e
i
r
o
t
u
p
t
u
O

0 

s
n
i
a
g
y
c
n
e
i
c
i
f
f
E

0 

s
e
v
i
t
a
i
t
i
n
i

U
E
r
e
h
t
o

h
t
i

w
e
c
n
e
r
e
h
o
C

r
o
f

t
e
g
d
u
B
n
i
h
t
i

W

0
2
0
2
e
p
o
r
u
E

y
b

y
t
i
l
i
b
a
t
p
e
c
c
A

s
e
t
a
t
S
r
e
b
m
e
M

Rating of options 

0 

Yes 

MEDIUM 

0 

++ 

0 

++ 

0 

+ 

++ 

0 

++ 

+ 

++ 

Yes 

HIGH 

+++ 

++ 

+++ 

++ 

++ 

+++ 

-- 

-- 

-- 

-- 

-- 

-- 

+ 

0 

++ 

+++ 

++ 

No 

LOW 

NA 

LOW 

LOW 

NA 

LOW 

+++ 
= 
PREFERRED 
OPTION 

++ 

-- 

Option 1:  
Baseline 
Scenario 

Option 2:  
Upgrade the 
baseline option  

Option 3:  
Upgrade and 
cater for new 
policy  

Option 4:  
No programme 

Annotation:  Magnitude of impact indicated compared to the baseline scenario:   
+++ strongly positive, ++ quite positive, + positive, 0 like baseline scenario, - negative, -- quite negative, --- strongly negative, NA not applicable 

Source: 

DG TAXUD 

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