COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT on the application of Council regulation (EU) no 904/2010 concerning administrative cooperation and combating fraud in the field of value added tax
Date: 2014-02-12
Institutions: European Commission
Subjects: VAT, exchange of information, intergovernmental cooperation (EU), tax collection, tax evasion













EUR-Lex - 52014SC0039 - EN











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52014SC0039

COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT on the application of Council regulation (EU) no 904/2010 concerning administrative cooperation and combating fraud in the field of value added tax /* SWD/2014/039 final - 2014/ () */









Contents
1............ Introduction. 3
2............ Analysis
of the responses to the questionnaire. 4
2.1......... Exchange
of information upon request (Articles 7 to 12) 4
2.1.1...... Problems
identified by the previous report 4
2.1.2...... Request
for information and for administrative enquiries (Article 7) 7
2.1.3...... Time
limit for providing information (Articles 10 – 12) 9
2.2......... Exchange
of information without prior request (Articles 13 – 15) 10
2.3......... Feedback
(as described under Article 16) 11
2.4......... Storage
and exchange of information specific to Intra-Community transactions (Articles
17 - 24) 13
2.4.1...... The VIES
database. 13
2.4.2...... The
automated access to databases. 14
2.5......... Presence
in the administrative offices and participation in administrative enquiries
(Article 28) 14
2.6......... Simultaneous
controls (Articles 29-30) 16
2.6.1...... The
organisation of the multilateral controls. 16
2.6.2...... The
communication between the MLC-departments and other departments. 16
2.6.3...... A
possible future approach: joint audit 17
2.7......... Providing
information to taxable persons (Articles 31-32) 18
2.8......... Eurofisc
(Articles 33-37) 19
2.9......... Relations
with the Commission (Article 49) 20
2.10....... Relations
with third countries (Article 50) 21
3............ A
special topic: the mini-one-stop-shop (MOSS) 21
4............ General
appreciation of the functioning of administrative cooperation. 22
5............ General
conclusions. 23
List of
abbreviations. 25
1            Introduction
According to Article 59 of
Council Regulation No. 904/2010 on administrative cooperation in the field of
VAT, the Commission must report by 1 November 2013 and thereafter every 5 years
to the European Parliament and the Council on the application of the
Regulation. 
The report which this paper
accompanies is the first since the adoption and entry into force of Council
Regulation No 904/2010 on 7 October 2010. The latter is a recast of the former
Council Regulation No 1798/2003 and offers Member States further tools for
enhanced administrative cooperation to support the fight against VAT fraud. 
The Commission would stress that
the report should be seen as an opportunity to pool Member States' experience
with the aim of improving the operation of those arrangements as mentioned
under Article 49, Paragraph 1 of the recast Regulation. Furthermore, this
report has not to be seen only as an overview of the application of the
regulation as such, but also and mainly as a basis for a permanent and
structured dialogue between the Commission, the European Parliament, the
Council and the Member States in order to improve the efficiency of
administrative cooperation in the field of VAT. 
The study to quantify and analyse
the VAT gap published by the Commission on 19 September 2013 gives a better
understanding of the recent trends in the field of VAT fraud. The present
report to be published according to Article 59 of Council Regulation No
904/2010   (giving an overview of the functioning of administrative cooperation
for the fight against fraud) and the  report on the collection and monitoring
of VAT to be published by end of this year by the Commission according to
Article 12(3) of Council Regulation 1553/89 (the so-called article 12 report),
complement the study on the VAT-gap and try to give an evaluation of the
functioning of the administrative cooperation and the VAT collection and
control procedures applied internally in Member States
Since this report should reflect
the practical use that national tax authorities make of the different
instruments of administrative cooperation and fight against VAT fraud, this
evaluation can obviously only be made on the basis of substantial input from
the Member States. It is also important that good practices in administrative
cooperation can be identified. 
Therefore, the Commission considered
that the information needed to make a
comprehensive assessment of administrative cooperation under the new Regulation was best collected
through a questionnaire sent to the Member States. 
The current commission staff
working document analyses and summarizes the replies received from the Member
States; it basically describes how Member States themselves assess the
functioning of the Regulation 904/2010. 
Although this document is an
important source of information for the Commission report on the application of
Regulation 904/2010 concerning administrative cooperation in the field of VAT,
it is not the only one.
Indeed, other sources of
information, such as existing reports (e.g. Eurofisc reports), discussions with
Member States on a bilateral basis or during meetings (such as SCAC) and the
annual statistics of 2012 have been used when drafting the Commission's report
in order to complement the results of the questionnaire.
2            Analysis of the responses to the questionnaire
In the questionnaire, some of the
questions build further on the previous evaluation report presented in 2009[1]. They
aim to analyse to what extent the recommendations/conclusions of the previous
report were taken into account to further improve administrative cooperation. 
In addition, some new provisions
were introduced by the new Council Regulation No 904/2010. Consequently,
several questions specifically focus on the implementation of these new
provisions as this will be the first evaluation of these new tools. 
Some of the provisions of the new
Regulation have entered into force in 2013 or will only enter into force in 2015.
 Therefore these provisions are not covered by the current report.
Furthermore, some questions were
raised inquiring for new ideas on how to further improve administrative
cooperation. These questions should be considered as a first brainstorming
exercise.
Although all 27 Member States
replied to the questionnaire, it must be pointed out that the quality of the
replies received from Member States was very different. While some Member
States provided detailed and well-argued responses, other formulated only very
brief replies without further explanations or clarifications. Germany mentioned that for a number of questions the reply could not be delivered within
the proposed timeframe of 2 months because the participation of the 16 Lander
was required.
2.1         Exchange of information upon request (Articles 7 to 12)
2.1.1      Problems identified by the previous report
The previous report on the
functioning of the administrative cooperation[2] 
highlighted a number of problems relating to the exchange of information. It
concerned problems existing in the requested Member State, but identified by
the requesting Member State. The Commission wanted to know whether the problems
relating to the identification of the competent liaison office (CLO), the lack
of timeliness of replies and the lack of notification about not meeting the
deadline were still occurring.
1.      The identification
of the competent liaison office in the requested Member states (Q1-4).
All Member States confirmed that
it is not difficult to identify the CLO when all exchange of information via
CCNmail is centralised in the CLO and the list of the competent authority is
constantly updated on CIRCABC. The problem does not exist any longer. It was
recommended in the previous report that Member States should respect the
principle that only one contact point for the exchange of information be
communicated to other MS.
2.      The (non) timeliness
of replies (Q5-6). 
(a) State of play
The annual statistics for 2012
show that a significantly high percentage of requests are not replied to within
the three month-deadline. There were late replies to the requests for information
in 43% of the cases and 6 Member States replied late in more than 50% of the requests.
Several Member States indicate
that they have implemented solutions to address this shortcoming:
1) introducing regular checks of
deadlines (CZ, FI, LV, NL, RO, SI and UK) with the development of IT
applications to manage electronically the requests for information received,
e.g. automatic warnings (BE, FI, FR,PT), automatic transmission to the local
offices concerned (HU) or information available on the taxpayers gathered from
the national databases (EE);
2) improving both the
organisation of the CLO in order to have one competent authority and one
location (NL, SE) and the communication between the CLO and the local offices
(BG, DK, NL, UK); 
3) circulating internal
instructions stressing the importance of providing prompt replies to requests
from other Member States (CY, RO); 
4) organising training sessions
to allow auditors to become familiar with the cross border exchange of
information, with the electronic procedure and with other IT applications (CY,
ES, HU); 
5) exerting greater pressure on
taxpayers and their auditors to provide the requested information / documents
(CY);
6) sending reminders to the
offices concerned (IR, LT, NL, DE) or to the requested Member States if no
reply is received within the set deadline (LT);
8) increasing human resources (HU, SK); 
(b) Suggestions
A number of Member States have suggested
reducing the number of late replies through the following initiatives: 
1) information could be requested
directly to the taxpayers instead of carrying out audits or checks on the spot
(BE); 
2) Member States should send
partial replies containing information from the databases or interim
information from the controls if still pending (BG, IE);
3) increasing the number of the
officers dealing with requests for information (CY);
4) all the requests should be
made in English (CY);
5) e-learning courses should be
organised in preparation for the implementation of the new electronic forms
(ES);
6) improving the IT system for
the electronic management of the requests for information (FR, SK);
7) Member State’s performance
levels should be regularly reviewed and discussed at the SCAC to identify the
reason(s) for the problems. However, if the problems continue, the Commission
should consider taking further action either at legal or at political level in
cases where a Member State significantly and persistently underperforms (UK).
For more information on this
subject, reference is made to chapter 2.1.3 of this Commission Staff Working
Document.
3.      The lack of
notification when the deadline for replying to a request will not be
respected (Q7-9). 
(a) State of play
The annual statistics show that
member States in most cases do not notify the (reasons for) lateness of the
replies. It appears that a notification justifying the delay is sent for only
10% of late replies.
The requested Member States argue
that they have addressed the problem and improved their procedures through the
following actions: 
1) they have increased awareness within
the CLO (AT, PT) or in the local offices (SE);
2) they have developed an IT
application which automatically sends out to the MS concerned a notification of
the delay some days before the deadlines expires (PT, BE);
3) they have appointed officers
monitoring the requests who notify the CLO well in advance when requests cannot
be replied on time (EE, CY, LV), indicating the expected time and the reasons
for late replies (CY, LT);
4) they have send reminders
either to the requested Member State (EL, CZ, NL, LV, PL, SI, UK) or to the,
contact persons concerned at local level (PL, SE);
 5) One Member State (HU) has drafted guidelines and organised training courses to raise awareness about the
importance of the deadlines and on what to do when the deadline cannot be
respected.
Despite all these domestic
measures, 22 Member States confirm that the lack of notification still
persists.
 (b) Suggestions
A number of Member States made
suggestions to improve the notification procedure by:
1) implementing systematic
control of deadlines by human resources and technical support (CZ);
 2) sending reminders to the
requested Member State (DK);
 3) informing the Member State concerned at least that the request is in process and that the answer will
come sooner or later. In addition, the requested MS should send partial replies
(FI);
 4) having CLOs monitor the
deadlines more strictly (LV);
 5) more frequent statistics
(e.g. 4 times a year), so that all Member States are confronted with their
positive/negative performances more frequently. Moreover the Member States should
take as a starting point for the determination of a late reply all replies received
during a calendar year. This means that the compilation of the yearly
statistics could start on the 2nd of January of the year. As a consequence,
the  statistics would be available and could be discussed at the SCAC
springtime meeting instead of the autumn SCAC meeting and Member States should
be able to anticipate on the outcome of statistics at an earlier stage.(NL); 
6) publishing the statistics in
graph format and regularly reviewing and discussing Member States’ performance levels
at the SCAC in order to identify the reason(s) for the problems. However, if
the problems continue, the Commission should consider taking further actions at
legal or political level in cases where a Member State significantly
underperforms (UK); 
7) introducing the obligation to
provide notification (SK). 
2.1.2      Request for information and
for administrative enquiries (Article 7)
4. Article 7 of
Regulation 904/2010 provides for the possibility to send requests for
information and requests for administrative enquiries (Q11-13).
Here it is important to see how
Member States deal with such requests that they receive. The statistics show
that some Member States carry out administrative enquiries for each request for
information they receive: 
   || How many request for information did you receive in 2011-2012? || How many of these requests triggered an administrative enquiry? || In percentage || How many times did you refuse to carry out an administrative enquiry when you received a specific request? 
 AT || 2862 || N/A * ||   || 0 
 BE || 2308 || N/A ||   || 0 
 BG || 1910 || 1894 || 99 % || 0 
 CY || 963 || N/A ||   || 1 
 CZ || 3681 || 3313 || 90% || 0 
 DE || 19342 || N/A ||   || N/A 
 DK || 1420 || 253 || 17.8 % || 2 
 EE || 912 || N/A ||   || 0 
 ES || 3468 || 2598 || 74.9 % || N/A 
 FI || 272 || N/A ||   || N/A 
 FR || 3647 || 367 || 10 % || 0 
 GR || 1037 || 1037 || 100 % || 0 
 HU || 4473 || 4473 || 100 % || 0 
 IE || N/A || N/A ||   || 0 
 IT || 5648 || N/A ||   || 0 
 LT || 727 || 2 || 0,2 % || 0 
 LU || 677 || 677 || 100 % || 0 
 LV || 1194 || 1194 || 100 % || 0 
 MT || 217 || 200 || 92.1 % || 0 
 NL || 4894 || N/A ||   || 0 
 PL || 3847 || 3847 || 100 % || N/A 
 PT || 564 || 364 || 64.5 % || 0 
 RO || 4252 || N/A ||   || 0 
 SE || 730 || 730 || 100 % || 0 
 SI || 591 || N/A ||   || 0 
 SK || 7008 || N/A ||   || 0 
 UK || 3527 || 3109 || 88.1 % || 0 
 * Not available/ exact number unknown 
In the majority of Member States,
all or almost all the requests trigger an administrative enquiry. Exceptions
are LT (727 requests and only 2 triggered an administrative enquiry) and FR (in
2011, 1935 requests and 367 triggered an administrative enquiry). 8 Member
States were not in a position to deliver detailed data (AT, DE, EE, FI, IR, SE,
SI and SK). 
5. Grounds for refusal
to carry out an administrative enquiry (Q14)
Only 2 Member States (CY, DK)
state they had a couple of cases where they refused to carry out an
administrative enquiry.
Cyprus explained that the
administrative enquiries were refused because national legislation does not
allow VAT Officers to obtain the information / documents requested, while
Denmark replied that it had refused to carry out the enquiries because the
request was too broad; although the Member States concerned had been asked to
specify the request in more detail they have never received a reply to this
request.
6. Use of the best
practices approved by SCAC in working document 562 (Q15)
Article 7 (4) of Council
Regulation (EU) No 904/2010 establishes the principle that Member States can
refuse to conduct administrative enquires in the field of  distance selling,
services connected with immovable property, telecommunication services, radio
and television broadcasting services and electronically supplied services and 
hiring, other than short-term hiring, of a means of transport to non-taxable
persons only when, in conformity with the statement of best practices,
the number and the nature of the requests for information impose a
disproportionate administrative burden on the requested authority.  
This statement of best practise
was further elaborated and reported to SCAC in the above mentioned working
document 562 by providing recommendations on how to deal  with such requests
mentioned in Article 7, §3 and §4 of the Regulation.
On the question of whether Member
States have already used these recommendations 5 Member States (AT, DK, FR, IE,
SK) replied that they have never used this list with recommendations. In
contrast, the other Member States replied that they apply all or almost all of
the checks before sending the request and the reply in order to avoid a
disproportional administrative burden. 
7. Difficulties
encountered when conducting such an administrative enquiry (Q16)
In general, the difficulties
encountered when conducting a such an administrative enquiry are not different
from those encountered during domestic administrative enquiries and almost all
Member States replied that they do not encounter difficulties linked to the
administrative enquiries as such. 
Nevertheless 4 Member States
indicate that they do experience some difficulties due to the fact that: 
1) the requests concern taxable
persons that have disappeared or have gone bankrupt; 
2) the required documentation
necessary to follow up the request is not attached to the request (BE); 
3) sometimes Member States ask
for old data or for verification of low value transactions (UK); 
4) translations are time-consuming;

5) requests are not clear and
understandable; 
6) requests concern firms whose
directors or real beneficiaries live abroad or whose names are unknown (CY). 
2.1.3      Time limit for providing
information (Articles 10 – 12)
The time limit for providing
information is defined under Articles 10 – 12 of Regulation 904/2010. This time
period is either 3 months or 1 month in order to fight efficiently against VAT
fraud and to ensure a proper collection of VAT. It is important for Member
States to exchange information as soon as possible. In this context it is also
important that these deadlines are respected. In the statistics the Commission has
evaluated the late replies from the point of view of the requesting Member State. With the questionnaire, the Commission tried to evaluate the late replies
from the point of view of the requested Member State.
8. Number of cases in
which the deadline is not met in 2011 according to the requested Member State
(Q17 and 18) 
On the basis of the annual
statistics, the graphic (see chapter 2.1.1) shows the percentage of late
replies per Member State for the years 2011 and 2012:
The 2 Member States with the
lowest percentage of late replies and who do not have a problem in meeting the
deadline are Finland and Slovenia. All other Member States could not respect
the deadline for most of the requests. Greece and the Slovak Republic have the biggest difficulties in respecting the deadline to reply on time. 
Member States indicated in replies
to the questionnaire that the main reasons for not respecting the deadline are:

1) a lack of resources; 
2) non-cooperation of or
difficult contact with the taxpayers and 
3) complexity of the case (AT,
LU, PL, BG, CY, DK, EE, ES, FR, EL, HU, IE, LT, PT, RO, SE, SI, SK, UK).
Further reasons provided by the
Member States are: 
4) technical reasons such as e.g.
migration to a new application or reorganisation of the tax administration (BE,
EL, SK);
5) huge increases in the number
of requests due to excess fraud in the carbon credits sector;
6) the necessity to start an
administrative enquiry (IT, CZ, FR, HU, PL, PT, RO); 
7) internal procedures within the
CLO or between the CLO and the local offices (NL); 
8) the fact that some requests
received are unclear (SE); 
9) a huge increase in the number
of requests received (SK); 
10) the necessity to start
criminal investigations or associated actions (UK); 
11) the reluctance of the audit
teams to perform again checks on the same taxpayers in a short time (RO).
9. Concrete measures
taken or foreseen to improve the timeliness (Q19) 
The replies received from MS
indicate, however, that they have taken concrete measures (or at least foresee
concrete measures) to improve this situation so that deadlines could be better
respected (reference is made to chapter 2.1.1 of this document)
The Regulation offers the
possibility for the Member States to agree different time limits on a bilateral
basis in certain special categories of cases. The majority of Member
States have no or little experience with the application of this provision.
2.2         Exchange of information
without prior request (Articles 13 – 15)
The list of categories for the
exchange of information without prior request has been reduced in the new
Articles 2 and 3 of Commission Implementing Regulation (EU) no 79/2012. As a
result, only 2 categories are maintained and Member States still have the
possibility to abstain from participating in the automatic exchange of
information. The fact that the list has been reduced also implies that those
categories remaining are considered by all Member States as important
information for which automatic exchange of information is useful/necessary to
ensure a proper collection and control of VAT. 
10. Abstention from
participating in the first category: information on non-established taxable
persons (Q21-Q22). 
Based on the questionnaire, only
three Member States abstain from participating in the automatic exchange of
information on non-established taxable persons, because these Member States
have either technical difficulties to retrieve this information (NL, PL), or
consider it a disproportionate administrative burden to collect this
information (LU).
The Commission compared the
replies with the notifications received according to Article 4 of Commission
Implementing Regulation (EU) no 79/2012 where two Member States (LU, PL)
notified that they do not participate in the exchange of category 1 a)
information (allocation of VAT identification numbers to taxable persons
established in another Member State), and five Member States (DE, EE, NL,
PL,UK) do not participate in the exchange of category 1 b) information (VAT
refunds to taxable persons not established in the Member State of Refund but
established in another Member State – Council Directive 2008/9/EC)
11. Abstention from
participating in the second category: new means of transport (Q23-24) 
Based on the questionnaire, 7
Member States abstain from participating in the automatic exchange of
information on new means of transport. The reasons for the abstention are: 
1) information not available and
not collected (RO, SK, MT, FR); 
2) the collection of this
information would imply the introduction of new obligations for the taxpayers
(IT, LU, RO); 
3) the increase in the
administrative and financial burden is too extensive (IT, IE, RO, FR).
The article 4- notifications
received from FI, EE, EL mention clearly that these Member States too abstain
from the automatic exchange of information subcategory 2a) (FI, EE, EL) and
subcategory 2c) (EL). These three Member States did not provide a justification
for abstaining from the exchange of this kind of information.
12. Use of
information received automatically (Q25)
From the report of 2008 it arose
that sometimes the form was not filled in properly (wrong boxes completed, some
boxes not completed, incorrect information etc.). Therefore the receiving
authorities had to use extra resources to double check the received
information. This matter should, however, be solved with the introduction of
the new e-forms. 
In general, the vast majority of
Member states upload the information in a database that can be consulted by the
(local) tax officials or else the information is first analysed and summarised
and afterwards forwarded to the (local) tax officials. The information is used
for risk analysis and for further verification during audits. For example the
information concerning new means of transport is used to check if the vehicle
is registered in the car registry and VAT has been paid. 
13. The opt-out clause
that Member States can apply according to Article 14 of the Council Regulation
(Q 26).
Some Member states consider that
they are hindered by the opt-out clause because this type of information is
very useful for the fight against fraud especially since it can only be
obtained through this channel (BE, IR, LT. PT) and there is a high risk of VAT
fraud in the sector of new means of transport (CY, CZ, EE). Both categories of
information are useful for ensuring correct taxation. In addition, the
information concerning non established persons is also relevant for direct tax
purposes (BE); therefore it would be appreciated and preferred if all member
States would be able to deliver this information (SE, SI, and CZ). 
It is difficult to give an
in-depth evaluation since some Member States think that either it is too soon
to answer to this question (UK, NL) or they have not analysed this issue (RO,
FR, EL).
Belgium has developed an IT
system to exchange information automatically in relation to new means of transport
in agreement with the automobile sector and has offered to share this
information with other Member States. 
2.3         Feedback (as described under
Article 16)
Feedback is a new measure that
has been introduced in the Regulation at the specific request of several Member States that consider it necessary in some cases to obtain information on the usefulness
of the information provided and the purpose for which it has been used by the Member State receiving such information. Sometimes replying to a request from another Member State requires considerable work for auditors, and therefore it is interesting for
these persons at least to know whether or not this extra work was useful for
the requesting party. As this is a new tool, the Commission is interested as to
the extent this tool is currently being used and what the experience is from
Member States as to its usefulness.
14. Use of the
feedback in 2012 (Q27- 29)
Feedback is not requested
systematically but on a case by case basis. It appears that in the first year
of application (2012), 11 Member States asked for feedback (AT, BE, BG, CY, DE,
EE, FI, IE, LT, LU, UK) and the UK indicated that it considers feedback as an
important tool. This is supported by the 2012 statistics that show that the
total number of feedback requested is 460 of which the UK accounts for 346 cases. 
Member States are asking in first
instance for feedback, because they are of the opinion that feedback
information may have an impact on their own domestic fiscal tax assessments. It
may provide additional information for their own administrative investigations
and audits, in particular audits covering suspicious taxpayers or potential
fraudulent transactions. The information received with the feedback would then
also have a positive effect on the tax revenues (BE BG, EE, FI, HU, PT, ES, CY,
FR, LU and SE).
Furthermore, Member states also
ask for feedback where they provide spontaneous information or when a lot of
information has been requested and it has been difficult or resource intensive
to provide the information. It is obvious that Member States want to know
whether their effort has led to a valuable result (FI, UK).
A feedback mechanism is also
applied in the Eurofisc network (see chapter 2.8). 
15. Influence of the
feedback mechanism on VAT audits and controls and on the assessment of domestic
procedures (Q30-31)
Member States were asked whether
feedback has a positive influence on the motivation of tax auditors (e.g. more
spontaneous exchange) and whether feedback helps to identify and tackle
shortcomings in the administrative procedures.
It appears that the majority of
Member States consider it too early to say whether the feedback mechanism has
an influence on the own VAT audits and controls or whether it could help them
to identify shortcomings in their administrative procedures. Some others find
that feedback is useful (FI, LT, LV). Those Member States that say that
feedback has a positive influence, mention that 
- they experience an increase in
the number of spontaneous exchanges, although it is difficult to measure if
this is caused by the feedback mechanism (LU, RO, UK);
- Feedback is also valuable in
motivating auditors (LU, UK).
16. The qualitative
level of the feedback (Q32)
For the majority of the Member
States (16) it is not possible to make an evaluation or assess how much of the
feedback has been used effectively (AT, BE, CZ, DK, FI, EL, HU, IE, IT, LT, MT,
PL, PT, RO, SE, SK,). The volume exchanged does not allow assessing the quality
and effectiveness of requests for feedback. Slovenia replied that approximately
50% of the feedbacks sent have been used effectively. Some Member States
indicate that they are satisfied with the quality of feedback (CY, EE, ES, FR, LV, NL, SI, UK, FR), but overall they cannot provide further information. 
17. Specific reasons
for refusing to give feedback (Q33)
Almost half of Member States
indicate that they either have not refused to give feedback (BE, BG, CY, EE,
FR, HU, MT, RO, and SE, UK) or have not received any request for feedback to
date (AT, CZ, DK, EL, IR, and NL). 
Spain, Hungary, Italy and Sweden would consider feedback an administrative burden if requested on a
systematic basis. According to Lithuania feedback should be asked only when it
might be useful for further investigation in fraud cases. Portugal indicated that it would reply to those requests for feedback if related to
suspicions of fraud (e.g. carousel fraud, conduit companies etc.). The nature
of the case may make it burdensome to deliver the information within a short
time (FI, IT and UK).
2.4         Storage and exchange of information specific to
Intra-Community transactions (Articles 17 - 24)
2.4.1      The VIES database
The provisions relating to the
VIES database were amended to increase the quantity and quality of information
stored and exchanged (Articles 17 to 24). Although there is a new list of
information that needs to be stored and processed, it is important to note that
some of the information will only need to be available from 2015 onwards.
Member States must take the necessary measures to keep the database up to date
and quality checks have to be done (registration/de-registration). 
In June 2011 the Commission sent
a questionnaire to Member States to check the implementation of Articles 22 and
23 of the Regulation. All Member States explained how they have introduced
national measures in order to provide a reasonable level of quality and
reliability of data stored in the VIES database. The overview of the answers
received has been provided to the SCAC (SCAC working document No 592)
18. The overall
quality and reliability of data stored in the VIES database since the entry
into force of the new Regulation (Q34).
Since the entry into force of the
new Regulation, the majority of Member States which assess quality and
reliability of data (13) are generally satisfied with the changes. They point
out in particular the reduced number of retroactive corrections and
discrepancies, faster up-dates, more reliable turnover data. Four Member States
(DE, IE, NL and PL) pointed out that the quality and reliability of data had
not changed much. The Netherlands indicated, however, that the reduction of
time frames had accelerated the speed of information exchange, thereby
providing the tax administration with an important advantage.
Seven Member States (AT, BG, CY,
FI, EL, SK and HU) could not compare data because they either keep no
statistics or do not evaluate them. Of these seven, two Member States consider
it premature to draw conclusions.
Finally, Romania considers different declaration periods being the cause for less reliable data in the
VIES database.
19. Reduction of
mismatching in the VIES since the entry into force of the new Regulation (Q35)
Relevant data relating
mismatching[3]
in the VIES database is available from a few Member States only. It appears
that such automated matching is generally not carried out. Moreover, a few
Member States have difficulties finding a clear definition for calculating
mismatches.
In the four Member States where
such data is available (DK NL PT SI), the results are mixed. While in Hungary, the number of mismatches remains the same in 2011 and 2012, Lithuania and the Netherlands report a 10 % and 4 % drop, respectively, whereas Malta reports a rise of 8 %. Such
inconclusive data is probably the result of mismatches still being persistent and
varying from period to period.
20. Discrepancies in
VIES data e (Q36)
A minority of Member States (BG,
CZ, DK, FR, NL and SE) have identified discrepancies in VIES data[4]
(e.g. between the HVAT and the RVAT message). However, such occurrences
apparently happen in relatively rare cases. No exact numbers were given and
only one Member State (SE) pointed to 4 other Member States where the VIES
database allegedly does not contain all taxable persons. Deleted VAT numbers
are still indicated as active in some cases. On the basis of the replies it
would be hard to determine a common reason for discrepancies. However, one
Member State (NL) refers to regular discrepancies in two cases: when matching
OMCTL-messages to VAT verifications and L2/F2 messages to L2/F1 messages.
21. Update of the
information in the VIES database (Q37) 
The vast majority (24) of Member
States apply daily updates of the information in the VIES database. Three
Member States (BE, DK, PT) update VIES information on a weekly or monthly
basis, while 5 Member States (BG, CY, DE, ES, IE)) use different time schedules
for updating registration (daily) and turnover data (weekly, monthly). 
2.4.2      The automated access to databases
The Regulation now provides that
the competent authorities are to be given automated access to certain
information held by other Member States. 
How the automated access will
function in practice is the responsibility of Member States. Thirteen Member
States will grant access to the existing database, whereas 10 Member States
will develop a separate database for automated access and Spain indicated that it will use both the existing and a separate database. Two Member
States (BG and UK) indicate that they will apply another solution but did not
elaborate on the technical details. Finally, Luxemburg did not reply to this
question.
2.5         Presence in the administrative offices and participation
in administrative enquiries (Article 28)
The previous report identified a
number of problems in the applicability of this instrument. The most important
and recurrent reasons for its limited use were the lack of a national legal
basis to allow participation in national enquiries, specific national
conditions hampering the use of the instrument and language problems. Those
problems can only be dealt with at national level.
Nevertheless, the provision in
the recast Council Regulation was modified in order to accentuate the more
general nature of this possibility offered to Member States.
22. Are officials of
other Member States allowed to be present in your tax administrations offices
(Q39-40)?
From the 27 Member States, only
the Slovak Republic does not allow officials of other Member States to be
present in the tax administration’s offices. 
All other Members States allow
officials from other Member States to be present and have no specific
additional national conditions to apply this provision. These Member States
clarify that the authorities of the requested Member State must approve the
presence and that the enquiry is led by a domestic official present in the
local offices of the tax administration. According to the Regulation the
visiting official cannot exercise the powers of inspection, but the Netherlands state that the visiting official in consultation with the domestic auditor is
allowed to ask questions.
Nevertheless, Greece mentions that the presence of other Member States’ officials should be justified
with reference to a multilateral control or another type of control approved by
the competent national authority. Malta adds that the secrecy provisions of the
VAT legislation are also binding for the foreign officials. 
23. Are officials of
other Member States allowed to participate in administrative enquiries (Q41)    
Four Member States (CY, EL, IE,
and SK) state that they do not allow officials of other Member States to
participate in their administrative enquiries and one Member State (PL) did not
reply to the question. 
Slovak legislation does not allow
that officials from other Member States participate in the domestic enquiries;
only domestic officials of the VAT administration can visit premises and places
related to a taxable person. Cyprus explained that they have solved this
limitation by having the audit meetings in the offices of tax administration. Greece mentions that these actions involve the exercise of powers of public authority. 
The 22 Member States that do allow
officials of requesting Member States to be present during an investigation
have (in general) no specific national conditions that are applicable. They
consider Article 28 of the
Regulation 904/2010
a sufficient legal base for the presence in administrative offices and
participation in administrative enquiries. 
Although participation according
to Article 28 is passive (no exercise of powers of inspection), the Netherlands indicate that in consultation with the domestic auditor the visitor is allowed
to ask questions. 
24. Difficulties to be
present in other Member States' administrative offices and to participate in
administrative enquiries (Q44-45)
Almost all Member States (25)
do/did not encounter difficulties to be present in other Member States'
administrative offices or to participate in administrative enquiries of other
Member States. However, it must be stressed that a number of Member States (CY,
CZ, LT, MT, PL and PT) do not have any experience so far, because they have
never made use of this administrative cooperation instruments provided for in
Article 28. The statistics for 2012 mention that Article 28 was used 110 times
by 15 Member States, often in connection with the 42 multilateral controls
initiated in the same year.
Two Member States had their
requests refused. Finnish auditors could not be present in Malta in 2012, due to the Maltese national legislation. Nevertheless, it appears that Malta now allows foreign officials to be present. Sweden also saw its request to
participate refused by Poland, no further reasons were indicated. 
25. The Member States
gave a list of reasons they consider to be obstacles preventing an increased
use in the tools mentioned in Article 28 of Regulation (EU) 904/2010 (Q43):
·        
Limited
knowledge of existence and benefits of the tool: AT, HU, LV, LT and UK;
·        
Budgetary
reasons: AT, NL, RO, and LV;
·        
Language
/ translation problems: AT, BG, CZ, HU, PT, RO and SK;
·        
National
legislation and national internal procedures (e.g. deadlines to carry out an
enquiry) conceived as burdensome: BE, CY, FR, LV, PT, SE and SK; 
·        
Time
consuming: DK and LV;
·        
Limited
human resources: CZ, LV and SI.
2.6         Simultaneous controls (Articles 29-30)
2.6.1      The organisation of the multilateral controls
Although the instrument is very
well appreciated by the Member States, the previous report mentioned that there
was still room for improving the communication between the MLC-coordinators and
other departments (Central Liaison Office, Anti-Fraud Unit, Eurofisc),
eventually by adapting the existing MLC procedures in order to allow for a
quicker and less bureaucratic reaction in specific fraud related cases.
Nevertheless, the number of MLC's initiated annually remains stable. According
to the statistics of 2012, only 42 MLC's were initiated by 14 Member States (in
2011, 52 MLC’s were initiated).
26. Bottlenecks in
organising MLC's (Q48) 
The majority of the Member States
mention that from an organisational point of view they did not experience
bottlenecks (BG, DE, DK, EE, ES, FI, FR, EL, IT LT, LU, MT, PL, PT, SE, SI, SK,
UK). 
The other Member States pointed
out a number of coordination problems: it seems difficult to pick up MLC
initiatives in the established national audit planning schedules. MLCs can cause
a higher workload for local officers lacking experience in this area. In
addition, this additional workload is not always included in evaluation of the
activities carried out by national auditors, which reduces the incentive for
auditors to participate in an MLC.  
Some Member States react too late
to MLC requests for information (often 6-9 months) and there should be more
appropriate communication channels between auditors from involved MLC.
2.6.2      The communication between the MLC-departments and other
departments 
27. Communication
channels between anti-fraud units and MLC coordination units to react swiftly
in case of fraud (Q46)
In general, the Member States
have appropriate communication channels between units/persons dealing with the
fight against fraud and the MLC coordination units/coordinators. The
communication can go both ways: information from fraud units that lead to an
MLC and vice versa, MLCs leading to a criminal investigation. 
The way the communication is
organised varies from Member State to Member State and depends largely on the
administrative organisation of the tax administration within the Member State. Some Member States have direct (personal) contact, because anti-fraud
activities and MLC activities are both central services (BG, FI, ES, MT and
PT). In some Member States there is permanent contact as both activities are
situated in the same department (EL, LU, PL, SI, SK, DK), for example the MLC
coordinator is a tax official working in the anti-fraud unit. 
In larger Member States (DE, HU
and LT) with a decentralised structure the MLC coordination unit has direct
contacts with the local/regional control departments that carry out the MLC /
fraud investigations. 
28. Interaction with
the Eurofisc network (Q47)
The vast majority of Member
States confirm that there is good cooperation between Eurofisc and the MLC
coordination department to transfer information from the former to the latter. The
administration in these Member States is organised in such a way to facilitate
the provision of data useful for MLC's:
- The Eurofisc network is
integrated in the anti-fraud unit/control unit, that analyses the received
information and delivers it to the MLC coordination team when necessary (BG,
DE, IT, LU); 
- An official in the CLO or
MLC-coordination unit is at the same time covering the work of Eurofisc liaison
official (FR, EL, PL, RO, and SI);
- Quarterly meetings between both
units (IE); 
On the other hand, a number of Member
States said that the Eurofisc information did not lead to the initiation of
MLC's (DE, HU, IE, NL, and PT).
An example of intensifying the
use of Eurofisc intelligence to initiate MLC’s, is the pilot project on boats
set up within Eurofisc. The targeted information on pleasure crafts collected
in Eurofisc would serve as a basis to organise MLCs. 
Furthermore, Belgium has set-up a pilot project to arrange for a quick analysis team at European level,
composed of national officials with the aim to react to early warnings and to
have a global view of the fraud chain. This could be a source of information
that may lead to launching new MLCs. 
2.6.3      A possible future approach: joint audit
Some Member States use chapter
VIII, simultaneous controls, as the legal base (together with bilateral
agreements and the OECD convention) to carry out the so called "joint
audit ".
The OECD describes a joint
audit as two or more countries joining together to form a single audit team to
examine an issue(s) / transaction(s) of one or more related taxable persons
(both legal entities and individuals) with cross-border business activities,
perhaps including cross-border transactions involving related affiliated
companies organized in the participating countries, and in which the countries
have a common or complementary interest; where the taxpayer jointly makes
presentations and shares information with the countries, and the team includes
Competent Authority representatives from each country[5].
29.Member States’
experience with ‘joint audit’ (Q51-52)
A few Member States (EL, IE, LT, MT, NL and UK) national legislations allow joint audits as defined by the OECD. From
these 6 Member States, only 3 have had experience with joint audits.
Nevertheless, one Member State (LT) has carried out joint audits with a third
country (Norway) and the other two Member States (NL, UK) are exploring the possibility of starting up a pilot project with other Member States. From this
rather limited experience, we can learn that responsibilities, powers and restrictions
of the joint audit team are described in (bilateral) agreements on mutual
administrative assistance and exchange of information in tax matters. The
coordination of the joint audit should also be agreed and ensured in advance
between the countries and allocated to one (or more) person(s) under the
authority of the tax administrations. 
30. When would the use
of joint audit be considered more useful than multilateral controls (Q49-50)
Member States gave very varied
replies on whether a joint audit would be a useful tool and on whether it would
be more useful than an MLC in certain circumstances. The majority of the Member
States would consider the joint audits as defined by the OECD to be a useful
tool, although most Member States could not give a straight answer because they
have no practical experience and it is still unclear what the advantages
compared to an MLC would be. It is obvious that too many legal and
organisational questions remain unanswered (for example a lack of legal basis,
national procedures not adapted to this, separate jurisdictions, consent of the
taxable person) in order to consider whether the joint audits would be a useful
tool. Nevertheless, some Member States mentioned that joint audits by a single
audit team could in theory be more efficient than an MLC in cases where a quick
information exchange is needed and in direct taxation cases where very large
companies with subsidiaries are involved (e.g. transfer pricing). 
The Member States (NL, UK) that
set up a pilot project want to verify whether a single audit team would
accelerate common understanding of the issue and be less costly for the
administrations as well as for the tax payer, because there will be only one
audit with one result. The main reasons for carrying out a joint audit are:
·        
to
reduce the administrative burdens on taxpayers and tax administrations.
·        
to
reduce the uncertainties in international tax questions, better judgement on
international tax risks, to tackle cross border risks more efficiently and more
effectively. 
·        
to
learn from each other and have a better understanding of each other’s audit
methodology.
2.7         Providing information to taxable persons (Articles
31-32)
31. The confirmation
of the validity of the VAT identification number for traders (Q56-59)
In order to increase the legal
certainty for traders, the latter can obtain confirmation of the validity of
the VAT identification number (VAT id-nr) of their customers in some Member
States only provided they have given their own VAT id-nr.
To provide information to taxable
persons a VAT information exchange system (VIES) has been set up by the Member
States, with the assistance of the Commission. Several Member States (19) still
have a domestic VIES system that traders can consult to get confirmation of the
validity of the VAT ID-nr., in order to increase the legal certainty vis-a-vis
the tax administration. 8 Member States (BG, CY, ES, EL, MT, NL, PT, SE) state
that they do not have a domestic system and use only the Vies-on-the-Web
application. 
All Member States confirm the
validity of the VAT id-nr., as well as the name and address (display of this
data or via a yes/no reply) except Germany who only confirms the validity of
the VAT number.
As regards the application of
these provisions, Belgium and Spain remarked that Germany does not provide
confirmation of the VAT id-nr of domestic traders to requesting EU-taxable
persons in the Vies-on-the-web system. Germany argues that taxable persons have
to pass by their national CLO to acquire the confirmation data. For Belgium this is the sole reason why they continue to maintain a domestic system. 
2.8         Eurofisc (Articles 33-37)
The Eurofisc network is a newly
introduced rapid cooperation mechanism for dealing with large scale or new
fraud patterns. The provisions entered into force in November 2010. The network
established four working fields and delivered its first reports in March 2012
and in April 2013. 
32. The working
fields. (Q60)
Currently there are 4 working
fields. All the Member States consider that the current number of working
fields is sufficient and all sectors/areas of interest are covered by them.
Signals on new types of fraud mostly can be dealt with in the current working
fields, so an extra working field is not considered necessary at present. 
At least 6 Member States (BE, BG,
IE, LU, PT, RO) considered it useful to look at the possibility of conducting
joint risk analysis on the basis of the information available within the
network. Currently, all Member states are doing their own analyses as regards
the information exchanged through Eurofisc (individual analysis instead of
simultaneous). 
33. The effectiveness
of the Network (Q61-62-64) 
All Member states, except three
(EL, IT, MT) consider that the effectiveness of the Eurofisc network could be improved.
However the improvement should be achieved through a permanent process within
the group: regular meetings of the different working fields provide a platform
in order to discuss jointly the operation of the network and a change of
legislation does not seem necessary. 
Most of the Member States focus
on two issues that could be improved in order for the network to become more
effective. 
Firstly, the information received
should be more targeted. The large volume of information that is sometimes sent
is difficult to assess. Therefore several Member States ask that Member States use
an effective national risk analysis tool to filter the volume of data and to
ensure that only suspect cases are transmitted.
Secondly, to achieve a more
effective network most Member States propose a prompt and clear feedback
mechanism within the network. Feedback would be used to improve risk analysis
and this would lead to more targeted data. The feedback mechanism under
Eurofisc helps to qualify companies subject to an alert and ensure that these
companies are being monitored. 
Furthermore, Member States could
retrieve information from the VIES OTW DB for risk analysis purposes. The
information from the VIES OTW DB can be cross checked with data retrieved from
the recapitulative statements and/or with data delivered by the Eurofisc
network, in order to detect potential fraud cases at an early stage. With this
information one can check if the domestic trader acted in good faith and did really
asked for verification of another EU trader registered for VAT purposes. For
example, it can be very useful because one can check whether a fraudulent
foreign taxpayer (i.e. known from Eurofisc) was verified by some domestic
traders. Some Member States focus on new companies which at the start of their
economic activity are mainly carrying out cross border transactions
However, 14 Member States (BG,
CZ, EE, FR, Gr, IT, LT, MT, NL, PL, PT, RO, SE, SK,) do not use the data stored
in the Vies on the Web database for risk analysis purposes.
Some Member States emphasise the
need for active participation by all members in Eurofisc.
Finally, some Member States
stated that the annual report should include a status of the effort and results
but also suggestions and challenges to improve the network's operations in the
future. 
34. Internal
procedures to invalidate VAT-identification numbers in VIES on the basis of
information of Eurofisc (e.g. fraudsters, hijacked numbers) (Q63)
Nine Member States (AT, BG, CY,
DK, FI, PT, RO, SK and UK) replied negatively to the question as to whether
there were internal procedures to invalidate VAT Id-nrs in VIES on the basis of
information received through Eurofisc (e.g. fraudsters, hijacked numbers). 
The other Member States mentioned
that on the basis of the information relating suspicious VAT Id-nrs received
from the Eurofisc network, the tax administration may initiate a fiscal audit
to check whether the taxable person fulfils the conditions to be registered for
VAT. The outcome of the control can lead to invalidation of the VAT Id-nr.
2.9         Relations with the Commission (Article 49)
The previous report mentioned
that most MS did not perform a systematic internal evaluation of the national
arrangements on administrative cooperation. The Council was of the opinion that
there was no need to specify in the recast Regulation that Member States should
conduct regular audits of the operation of administrative cooperation. 
35. Internal
evaluation of the functioning of the arrangements for administrative
cooperation provided for in Article 49 of the Regulation (Q65-66)
The majority of the Member States
did not systematically evaluate the functioning of the administrative
cooperation procedures internally during the period since the previous report was
published. Only 12 Member States (BE BG, CZ, DE, EE, ES, LT, LU, LV, PL, RO, and SI) or independent body acting on their behalf have made an evaluation
according to Article 49 of the Regulation.
Where an independent body
(National Audit Office or internal audit department) audited the administrative
cooperation procedures and issued a report, the Member States took the
recommendations made into account for improving the mutual assistance and the
exchange of information.
Member States reported that the
main findings of the evaluation concerned the problem of the late replies and
the quality of the answers received on a request for information. Estonia noted that the use of spontaneous requests must be improved, while the Czech Republic stressed the need for more human resources.
Belgium and Romania made an
evaluation of borders agreements which are considered very useful since the
auditors at the borders act like competent authorities and are more motivated
to use administrative cooperation (MLCs arranged in this field have proven to
be more efficient)
Three Member States (LT, LU and
PL) indicate that the result of the internal evaluation on the use of the
Regulation showed an overall positive result.
2.10        Relations
with third countries (Article 50)
36. Exchange of
information with third countries (Q67-73)
Member States consider that
information coming from third countries could be useful to facilitate tax
assessment or fraud detection, but not all MS have concluded tax treaties
including VAT matters and thus it is not possible to pass on the information
from third countries. 
Member States have no uniform
approach with regard to the exchange of information with third countries. Some
Member States have signed/ ratified the OECD convention, which, however, is more
targeted at direct tax issues. Furthermore, some Member States have a number of
tax information exchange agreements while others have signed or ratified double
taxation conventions. 
Based on the figures given by Member
States, it can only be concluded that there is little experience regarding the
exchange of information coming from third countries in the field of VAT. The
very few Member States (BE, FR, SE and UK) that had an exchange of information
with third countries, could not provide exact figures on the number of such exchanges.
 Belgium, France and the United Kingdom have no statistics available on the
number of exchanges while Sweden forwarded useful information received from Norway and Russia to other Member States on the basis of the Nordic convention and the Memorandum of
Understanding with Russia on 3 occasions and similarly it sent 3 times to those
same third countries useful information.
37. The special
schemes: a bilateral agreement arranging administrative cooperation with certain
third countries (Q74) 
A majority of 22 Member States
consider that a bilateral agreement arranging administrative cooperation with certain
third countries in the framework of the special schemes (mini-one-stop-shop)
would be the way forward. Other Member States argue that such agreements with
third countries are the competence of the Member States. 
An EU bilateral agreement with certain
third countries should be more advantageous, for example to check non-EU companies
in the context of the MOSS scheme as of 2015 and to ensure  that equal control
efforts are targeting both EU companies and companies established outside the
EU. 
3            A special topic: the
mini-one-stop-shop (MOSS)
As from January 2015, the place
of supply of telecommunication services, broadcasting services and electronic
services to private individuals will be the Member State wherein which the
customer is located, rather than the Member State wherein which the supplier is
established. 
A mini One Stop Shop (MOSS) will,
at the same time, be introduced as a simplification measure and will allow the
supplier, rather than register for VAT in each Member State in which he has a
customer, to register, declare and pay the VAT due on supplies of
telecommunications, broadcasting and electronic services in other Member States
via a single web portal. The MOSS will be an option for businesses who will
still nevertheless have the possibility to register in each Member State where they have clients.
The MOSS will also have an effect
on administrative cooperation amongst Member States in the area of taxpayer
audit and control. Up to now, the Member State where the VAT is due had
complete control of the registration of the taxable person, the VAT returns and
the audit of the returns and collection of the amount of VAT due on its
territory. While the Member States remain the competent authority for audits concerning
the amount of VAT due to their national Treasury, with the MOSS, they will have
to cooperate and be dependant on the cooperation of the MSI in helping ensure
that the correct amount of tax is declared and paid. It is also important to
remember that, in the MOSS, Member States can be both a Member State of identification (MSI) and a Member State of consumption (MSC). 
Work is also carried out on the coordination
of audits and exchange of information to make sure that companies operating
under the MOSS do not face disproportionate administrative burdens in this
context. Several tools are available for this purpose in the EU regulation on
administrative cooperation and the Commission is promoting an extensive use of
these tools in order to minimize burden on business. 
A Fiscalis project group (FPG86
on audit and control of the MOSS) has been set up to draft guidelines and
recommendations to improve cooperation between Member States. This project
group has drawn up recommendations on how information can be requested from
traders using the SAF-MOSS scheme, on how these businesses could best be
contacted in case additional information or enquiries are necessary. Since
there is no obligation for Member States to accept these guidelines unanimously,
the Commission hopes that Member States will apply these guidelines as a
gentleman's agreement, thus easing the burden on business and facilitating the
use of the simplification mechanism.
4            General
appreciation of the functioning of administrative cooperation
38. Other problems
notified and suggestions to improve the functioning of the administrative
cooperation in general (Q76-79)
In their replies Member States
made a number of suggestions to improve the functioning of administrative
cooperation. Moreover, at the end of the questionnaire Member States were
specifically asked whether they had any suggestions for improvements to make.
The vast majority of the Member
States have no further comments; a minority refer to national issues (such as
the lack of resources) and long standing problems with regard to the exchange
of information (incomplete background data in requests for information;
discrepancies in the statistical information; retroactive changes to VIES
database; different rules regarding the deadline for replies). 
Ten Member States (DK, ES, FI,
EL, HU, IE, MT, PT, RO and SK) appear to be satisfied with the current
functioning of the administrative cooperation and have no suggestions for further
improvements. 
A specific problem raised refers
to the fact that some Member States do not fully comply with the use of CCN/CSI
mailboxes or misuse the forms, often causing significant burden on the
requested tax administration. Another comment concerned the compatibility
problems arising from Member States not implementing new "system
versions" simultaneously, and the use of non-uniform specifications which
jeopardizes access to VIES. 
Some suggestions of a practical
nature relate to the quality of the SCAC requests and keeping deadlines for the
replies. Some Member States recommend following solutions: 
·        
penalties
for poor performance in meeting deadlines/handling requests for exchange of
information;
·        
mandatory
feedback;
·        
annual
list of statistics so that Member States can mutually compare their ranking, i.e.
collecting statistics on deadlines missed beyond 6 and 12 months;
·        
raising
the threshold for requests;
·        
increase
management awareness;
·        
SCAC
forms should be sent only if it is confirmed that all possible information
resources were exhausted in the requesting Member State;
·        
action
by the Commission with respect to Member States that systematically fail to
fulfil their commitments under Regulation 904/2010.
Fiscalis CLO seminars were
pointed out as a good tool to improve administrative cooperation.
Dissemination of best practices
is also something that could be improved.
5            General
conclusions 
1)      The problem of identifying
the competent liaison office does not exist any longer. Member States have
worked on different solutions so that the contact point is easily identifiable 
2)      The lack of
notification that the deadline will not be met is still considered to be a major
issue: the measures implemented by Member States (monitoring IT applications,
reminders) have not yet given satisfactory results.
3)      The lateness in
replying to requests for information still persists. Almost all Member
states are not able to reply on time to requests for information. Some Member
States have late replies in 50% of cases. The trend has worsened between 2011
and 2012 showing that the solutions implemented to address this problem are not
appropriate or sufficiently effective. Nevertheless, on the one hand, in many
cases the reasons for the delay are reported as due to unforeseen or exceptional
circumstances such as complexity of the cases or a peak in the number of request
for information caused by an increase of fraud in certain sectors. On the other
hand the lack of staff and/or other resources (e.g. IT) is still mentioned as one
of the principal reasons for delays. 
To address this problem concrete
measures have been adopted by Member States, mainly based on a stricter control
of the deadlines with the help of IT tools, and through better cooperation with
local offices, where more emphasis is put on the importance of administrative
cooperation. Nevertheless the number of late replies remains critical.
4)      As regards requests
for information and administrative enquiries, very few cases were reported
where a request for an administrative enquiry had to be refused. The best
practices approved by the SCAC in working document 562 are not applied by all
Member States but the majority takes them into account. Member States did not
report any significant difficulty encountered when conducting any administrative
enquiry.
5)      On the automatic
exchange of information, the replies from Member States show that the
categories remaining are considered useful and the vast majority of the Member
States make use of this facility. Although the Regulation clearly indicates
that Member States should provide the reasons for abstaining in automatic
exchange of information for a specific category, the Commission notes that some
Member States did not provide such a justification.
6)      When looking at feedback,
there are Member States that have never asked for feedback in the last year. The
scarce use of feedback has, so far, prevented Member States from evaluating to
what extent it is effective. Nevertheless, the United Kingdom systematically
provides feedback spontaneously. In the context of good administrative
cooperation and best practices, this approach should be encouraged, as it is
the best way to inform the tax officials of the other Member State that the
information they forwarded was (to a certain extent) beneficial and that their
extra efforts lead to a result or was at least useful for the requesting Member
State.
7)      Article 28 of the
Regulation allows the officials of other Member States to participate in
administrative enquiries. The legislation states clearly that officials of
the requesting authority shall not exercise the powers of inspection. These
powers are exercised by the official of the requested authority acting as a
mediator during the enquiry. 
Slovakia does not allow the
foreign officials are present in their offices nor do they allow these
officials to participate in their administrative enquiries. While Greece and Ireland do not allow officials of other Member States to participate in administrative
enquiries (Article 28), their legislation does appear to allow carrying out
joint audits (OECD convention). The solution proposed by Cyprus (carry out the audit in the premises of the tax administration) could be a source of
inspiration for the other countries who do not allow participation in national
administrative enquiries.
8)      The Netherlands and United Kingdom set-up of a pilot project on joint audits and both countries could
share their experience gained from the pilot project. If such a tool were to prove
useful, the Commission could take an initiative to provide Member States with a
legal base to use the tool at EU level. 
9)      Within the Eurofisc
group, several Member States support the initiative to set up a pilot
project to conduct a joint risk analysis. This approach, together with an
effective feedback mechanism within the network, could be a response to the
request to have more targeted information. The Commission supports any
initiative that would enhance administrative cooperation.
10)  The Commission regrets that so
few countries conduct an internal evaluation of administrative
cooperation, since the regular internal evaluation exercise is a very
appropriate management tool that would help Member States and Commission to
improve the effectiveness of the cooperation.
11)  Based on the figures given by the
Member States, it can only be concluded that there is little experience
regarding the exchange of information coming from third countries in the
field of VAT. 
List of
abbreviations 
   ||   
 CCN/CSI mailbox || Common communication network/Common system interface  mailbox 
 CCNmail || Common Communication Network mail 
 CIRCABC || Communication and Information Resource Centre for Administrations, Businesses and Citizens 
 CLO || Central Liaison Office 
 COM || European Commission 
 CSWD || Commission Staff Working Document 
 EU || European Union 
 HVAT message || Historical VAT registration message (in VIES) 
 IT applications || Information Technology applications 
 L2/F1 message || Level2/Facility 1 message 
 L2/F2 message || Level2/Facility 2 message 
 MLC || Multilateral Control 
 MOSS || Mini One Stop Shop 
 MS || Member State 
 MSC || Member State of consumption 
 MSI || Member State of identification 
 OECD || Organisation for Economic Cooperation and Development 
 OMCTL message || Operator Data Control Message 
 RVAT message || VAT Registration message (in VIES) 
 SAF-MOSS || Standard Audit File for MOSS 
 SCAC || Standing Committee on Administrative Cooperation 
 VAT || value added tax 
 VAT id-nr || VAT identification number 
 VIES || VAT Information Exchange System 
 VIES OTW DB || VIES- on-the-Web Data Base 
   ||   
[1] COM (2009) 428 final of 18.8.2009
[2] COM (2009) 428 final of 18.8.2009
[3]               With
mismatching we understand a difference between the data received through the
recapitulative statement and the same data contained in the VAT returns
submitted by the traders
[4]               -
RVATR: registration message. It mainly contains the name, address of the
trader, issue date and cessation date of the VAT number.
- HVATR: Historical registration message. A set of
records containing the history of changes in the VAT number (change in the
name, address etc.). The more recent record should provide the same info as the
RVATR message.
- OMCTL: a VIES control message generated upon
reception of a VIES message and listing all suspicious VAT numbers it contains.
- L2F2: a VIES message providing the list of sellers
(and amounts) in the requested Member State for a given purchaser established
in the requesting Member State.
- L2F1: a VIES message providing the list of sellers
(and amounts) in the requesting Member State for a given purchaser established
in the requested Member State. 
[5]               Joint
Audit Report, OECD, FTA September 2010.