REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Final evaluation of the Fiscalis 2013 programme
Date: 2014-12-18
Institutions: European Commission
Subjects: EU programme, European tax cooperation, VAT, administrative formalities, database management system, disclosure of information, electronic document management, electronic government, exchange of information, tax evasion













EUR-Lex - 52014DC0745 - EN











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52014DC0745

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Final evaluation of the Fiscalis 2013 programme /* COM/2014/0745 final */










Table of contents

Table of contents. 2
1.      Background. 3
2.      The
programme. 3
3.      The
set-up of evaluation. 4
3.1.        Requirements,
purpose and scope. 4
3.2.        Methodology. 4
3.3.        Intervention
logic. 5
3.4.        Judgements
and conclusions. 5
4.      Effectiveness
of Fiscalis 2013 – the contribution story. 6
4.1.        Reduced
tax evasion and avoidance. 6
4.2.        Uniform,
effective and efficient application of EU tax legislation. 8
4.3.        Reduced
burdens on administrations and taxpayers. 9
5.      Efficiency. 10
6.      EU
added value. 12
6.1.        Complementarity
of the Fiscalis 2013 programme to other national, regional, international
initiatives  12
6.2.        Contribution
to broader tax objectives. 13
6.3.        Importance
of EU cooperation in reducing of administrative cost and burden. 14
6.4.        Trans-European
nature of the tax cooperation and common administrative culture. 14
6.5.        Sustainability
of results. 14
7.      Contextual
factors influencing the programme’s performance. 15
8.      Conclusions
and recommendations. 16

1.     
Background

The Fiscalis 2013 programme was established by Decision
1482/2007/EC[1]
as a multiannual Community action programme to improve the operation of the
taxation systems in the internal market. It was the fourth[2] in the series of
cooperation programmes launched following the creation of the European single
market in 1993. The abolition of physical and tax controls on goods crossing
the European Union’s internal borders created an urgent need to foster
intensive cooperation between the tax administrations. 
The subsequent programme iterations evolved over time,
aiming ultimately to improve the operation of the taxation systems in the
internal market. Well-functioning taxation systems in the internal market are
to be understood, as suggested by the legislator and interpreted by the
evaluation, as national financial interests protected against tax evasion and
avoidance, the market protected from unfair competition, and administrative burdens
on administrations and taxpayers reduced. In Fiscalis 2013, this general
objective was to be achieved through effective, efficient and uniform
application of the EU tax law as well as efficient and effective information
exchange, administrative cooperation and sharing of good administrative practice
in the areas of VAT, excise duties on alcohol and tobacco products, as well as
taxes on energy products and electricity and direct taxes.  

2.     
The programme

The primary beneficiaries of the programme were the tax
administrations of the EU Member States, followed by the tax administrations of
the candidate and potential candidate countries. In respect of candidate and
potential candidate countries, the programme intended to help their
administrations take the necessary measures for accession in the field of tax
legislation and administrative capacity. The economic operators were not
directly targeted by the programme, but some of its activities, through
reducing the administrative burden, brought them some benefits as well. 
To achieve the programme's objectives, the following
activities were carried out: (1) development and operation of communication and
information-exchange systems; (2) joint actions: multilateral controls,
seminars,  project groups, working visits and any other activities required for
the realisation of the objectives of the programme; (3) training activities. 
The overall financial envelope for the programme's
duration (6 years) was set at EUR 156.9 million. Fiscalis 2013 allocated
almost 75% of its budget to the development and maintenance of the trans-European
IT systems, spanning all EU Member States, with responsibilities distributed
across the national administrations and the European Commission. Collaboration
takes place on a secured Common Communication Network/Common Systems Interface
(CCN/CSI), which assures the interoperability of all national information
systems. Towards the end of the programming period, there were approximately 60
trans-European IT applications across the customs and the taxation fields,
using the CCN/CSI platform. 
The main IT applications were: 
·        
the VAT Information Exchange System (VIES) and
VIES-on-the-Web, 
·        
VAT Refund, VAT and Direct Taxation exchange
e-Forms,  
·        
the Tax Identification Number (TIN) on-the-Web
module, 
·        
the Excise Movement and Control System (EMCS), 
·        
the System for Exchange of Excise Data (SEED).

3.     
The set-up of evaluation
3.1.  
Requirements, purpose and scope

In compliance with Article 19(1) of the programme’s
Decision, the European Commission designed and contracted the final evaluation
of the programme to an external consultant. The evaluation study[3] was carried out by
Ramboll Management Consulting AS, assisted in the process by the steering group
composed of the relevant Commission staff and representatives of four
participating countries. The present report relies on the findings and
judgements as presented in the external evaluation report and validated by the
steering group. The report fulfils the obligation of Article 19 (3b) to submit
a final evaluation report to the European Parliament and the Council.    
The evaluation covered the entire duration of the
programme (years 2008-2013) and all types of activities. Given the increasing
emphasis on efficiency of EU expenditure and for the sake of proportional
analysis, the evaluation paid particular attention to the above mentioned IT
systems funded by the programme, whose effective functioning was considered
essential to the overall success of the Fiscalis programme. 

3.2.  
Methodology

The evaluation was structured around five main
evaluation questions: (1) the extent of the contribution of the pan-European
electronic tax environment towards better functioning of the taxation systems
in the internal market and the fights against fraud; (2) unexpected and/or
unintended results and impacts and their role in the programme’s operations;
(3) programme dissemination (awareness, knowledge and implementation), and; (4)
value for money; (5) the EU added value.  
There were several constraints, which had to be taken
into consideration when evaluating the Fiscalis 20103 programme. Firstly, many
of the programme’s activities were continued from its previous iteration –
Fiscalis 2007 - and as such the results and impacts could only rarely be linked
uniquely to the Fiscalis 2013. Secondly, there existed no baselines, or comparison
(counterfactual), against which the programme could have been judged and it was
not possible to assess a scenario without Fiscalis, except in a hypothetical
way. Thirdly, there was very little quantitative data available to the
evaluators, for example on amounts of fraud detected or tax recovered in
general, let alone the amounts that could be attributed to the Fiscalis 2013
programme; therefore the evaluators relied largely on the perceptions of the
stakeholders consulted (through general survey, targeted interviews and
in-field case studies), who more often than not were themselves unable to
quantify the benefits or advantages that they nevertheless felt to have
occurred. 
Moreover, irregularities detected using the tools
offered by the Fiscalis programme would usually require further investigation or
trigger legal proceedings. Any prevention on the other hand, and prevention of
fraud in particular, is inherently difficult to even estimate, let alone
evaluate. Finally, even if such data was accessible, establishing a strong
causal relationship between an observed change and the activities of the
Fiscalis 2013 would have been fraught with methodological errors. 
Taking into considerations these constraints and the
programme’s context, to answer the above mentioned questions, the evaluation
used the contribution analysis – a methodology particularly well
suited to evaluate the likely contribution of an intervention operating in a
complex environment to expected and observable results. This approach was chosen
with thorough consideration of the Fiscalis programme’s context, where asking a
classical causality question would not yield the sought for results, due to
multiple underlying mechanisms and factors within and outside of the programme
that allowed for a result to materialise, and any contextual factors that
influenced it. Instead, the contribution analysis sought to show the programme’s
likely contribution by demonstrating its direct use by national
tax administrations and the benefits it produced.

3.3.  
Intervention logic
  

The evaluation relied on a logical framework - the
intervention logic - linking the activities of Fiscalis 2013 (i.e.
various joint actions and IT systems) with its ultimate objective (i.e. better
functioning taxation systems in the internal market and fight against fraud),
translated into results (i.e. reduced tax evasion and avoidance, reduced
administrative burden, uniform and effective application of the EU tax law, and
better prepared candidate countries[4]).
This intervention logic, as depicted on the following page, represents the
understanding and interpretation agreed with the steering group and the external
consultant with regard to the expected causal linkages between activities,
output, results and impact (global objective).

3.4.  
Judgements and conclusions

Judgements and conclusions were derived directly from
findings based on the evidence collected. To ensure robustness of findings, the
evaluation used several data collection methods, including surveys, interviews,
desk research (including existing analyses and monitoring data) and case
studies. This methodological mix was on overall considered by the stakeholders
and steering group as appropriate and yielded the expected information.       

4.     
Effectiveness of Fiscalis 2013 – the contribution
story

Overall, the evaluation concluded that the contribution
of Fiscalis 2013 to the better functioning of the internal market for taxation
was clear albeit most of the time unquantifiable. The present section presents
the findings of the evaluation as regards the programme’s effectiveness
through its contribution towards the expected results on the reduced tax
evasion and tax avoidance (4.1); uniform, effective and efficient application
of EU tax legislation (4.2); reduced burdens on administrations and taxpayers (4.3).


4.1.  
Reduced tax evasion and avoidance

The main objective of the IT systems in the area of
taxation was to allow for a rapid exchange of secure information between the
tax administrations and thus for the efficient fight against fraud. These IT
systems can be seen as pivotal in supporting the daily work of tax officials
across the EU and have become thoroughly ingrained in the national
administrations. 
Two key IT systems contribute particularly to this
objective: the VAT Information Exchange System (VIES) and the Excise
Movement and Control System (EMCS) with the information provided
by the embedded System for Exchange of Excise Data (SEED)
database. The VIES system enables information on intra-EU supplies to be
exchanged between the tax administrations of the Member States, with the
purpose of VAT control; VIES-on-the-web allows for quick identification of the
VAT number of a trading partner; while the EMCS is a compulsory integrated
computerised system used by the excise administrations to monitor the movements
of excisable products. 
These IT systems provided the national authorities with
the means to control for irregularities in the cross border transactions. In
the VAT, this was possible thanks to information on the volume, nature and
parties in a VAT-taxable transaction. The recent changes to the VIES database
led to reduced number of retroactive corrections and discrepancies, faster
updates and more reliable turnover data. Moreover, the reduced timeframe for
submitting and transmitting recapitulative statements has accelerated
information exchange, thereby providing tax administrations with an important
advantage[5].
The evidence collected from the stakeholders through the external evaluation made
clear that the VIES system supported national administrations in identifying
fraud by allowing them to cross-check taxpayer declarations submitted
nationally with those submitted elsewhere and detect irregularities faster. 
In addition to the information from the VIES system, the
Fiscalis 2013 programme offered the tax officials the possibility to exchange more
specific requests or information using the CCN mail, in
particular the VIES mailbox, designed for the exchange of VAT-related e-Forms
and the TAXFRAUD mailbox. These two channels related to the detection of fraud registered
respectively over 578,000 and 187,000 messages exchanged between Member States
over the programme period 2008-13. These messages constitute confidential
exchanges between Member States and the European Commission is not privy to
their content. It is therefore impossible to directly evaluate the results
stemming from these exchanges but the sheer numbers show that the cooperation
is well present and dynamic. 
In the excise duties, the means to control for
irregularities in the cross border transactions were provided by the EMCS,
which allowed for the real time monitoring of the movements of duty suspended
goods, from the pre-arrival notification to the release for consumption, as
well as instant verification of the operators authorised to send and receive
excise goods provided by the SEED database. In addition, the
systems were considered by the stakeholders to have made fraudulent behaviour
more difficult, risky and costly, which in itself might have deterred the incentives
to fraud. After the introduction of the EMCS, for example, for fraud to take
place, the consignor and the consignee would have to collude, willingly taking
part in a fraudulent transaction. Also, the electronic guarantees bonded with
each transaction made it easier for the tax officials to help ensure that the
tax was duly collected.
The external evaluation concluded that the standard
e-Forms in the area of VAT and direct taxation contributed to fraud
prevention albeit not so much in terms of detecting fraudulent transactions,
but rather in assisting the tax officials in calculating the correct tax
liability. Similar results were achieved thanks to the automatic exchange of
information related to the Savings Directive[6]
using the common XML schema, which supported correct tax assessment, provided
the information was timely and correct. 
Outside of the IT area, Fiscalis 2013 programme offered
the Member States effective tools to cooperate against tax abuse – the joint
actions - giving the tax administrations a framework within which to share
their expertise and experience. It financed the logistic and technical
operations of the EUROFISC platform, which was regularly
identified by tax officials as an important channel to promote and facilitate
multilateral and decentralised cooperation among Member States, permitting
targeted and swift action to combat specific types of fraud. For example, the
rapid exchange of information between VAT anti-fraud units in different Member
States and the development of common risk analysis models were considered by
stakeholders as important tools for the early detection of carousel fraud[7], where quick reaction
from the authorities is known to be of key importance. 
Multilateral controls on the other hand, allowed tax auditors from the Member States to
jointly apply their knowledge leading to the identification of additional due tax
revenue of an approximate value of EUR 3.26 billion[8]. Moreover,
according to the tax authorities, together with the automatic exchange of
information under the Savings Directive, it created a ‘compliance effect’ amongst
taxpayers, making them realise that information on their operations and tax
obligations is shared between Member States. It directly reduced the incentive
to evade taxes by increasing the probability of it being detected.
Other joint actions, in particular the targeted events
such as seminars and working visits, gave the
national administrations a better understanding of the organisation set-up and
administrative practice of their counterparts in other Member States. While
this exchange did not lead directly to reduced levels of fraud, the tax
authorities did find it helpful for the effective information exchange to this
purpose, facilitating direct contacts between the relevant departments. 

4.2.  
Uniform, effective and efficient application of EU tax
legislation

The IT systems supported by the Fiscalis 2013 programme were
well used and globally appreciated (even though some might have not reached
their full potential yet as explained below). For example, there were more than
500 million messages[9]
per year exchanged by the national administrations on the EU cross-border
transactions through the VIES system alone and the system is one of the core
elements underpinning the administrative cooperation in the sense of the
Council Regulation 904/2010[10].
The evaluation showed that the system was an essential part of the Member
States’ tax administrations’ toolbox in conducting VAT risk analysis, with many
officials using it on a daily basis. 
Moreover, some of the systems directly support the
implementation of the EU acquis for administrative cooperation in taxation, as
do for example the Fiscalis-funded EMCS and VIES for the excise duties[11]
and VAT[12]
respectively, as well as the e-Forms in the field of direct taxation[13]
(albeit as of January 2013 only when the latter were introduced). Furthermore,
the cooperation through pan-European electronic systems helped Member States to
better respect the regulatory deadlines for exchange of information as required
by the above mentioned EU legislation on administrative cooperation, allowing
information to be exchanged faster and more precisely (thanks to, for example,
the standardised e-Forms).With regard to the EMCS system, the extremely low
technical error rate (occurring in less than 1% movements)[14] also shows that the
system offered a significant advantage over the old paper-based and error-prone
system, allowing the excise acquis to be implemented smoothly. 
The correct application of the EU legislation was further
facilitated by the joint actions, which allowed Member States to exchange views
on interpretation of EU provisions, implementation and enforcement challenges, national
characteristics, and best practice. What is more, the joint actions allowed
Member States to focus on specific problem areas, e.g. design and
implementation of a new e-Form (as it was the case for the VAT return form, which had to be in place
for the development of the Mini One Stop Shop) or implementation of a certain
IT application (e.g. the EMCS or VAT Refund). The importance of the informal setting
provided by the programme to discuss such issues allowed for a broader
convergence among Member States and was consistently praised by the
stakeholders during the evaluation. These aspects combined contributed to
increasingly uniform understanding, interpretation and design of the EU VAT law,
adjusted mutual expectations and mapping of different practices and procedures.

4.3.  
Reduced burdens on administrations and taxpayers

The external evaluation and other available qualitative
information showed that many of the IT systems led to a perceived reduction of
administrative burden for national administrations and economic operators.  
The e-Forms and CCN/CSI platform
used conjointly made the greatest contribution to reducing the burden for the national
administrations. It led to increased efficiency through limiting the lengthy resource-intensive
paper-based procedures, streamlining and simplifying the electronic exchange of
information thanks to the common template and guidance provided by the pre-set
fields to formulate and respond to requests. It also led to the increased
effectiveness of this cooperation thanks to greater accuracy and utility of the
information exchanged. This was mainly achieved through the targeting of the
sought-for and provided information and common interpretation of requests.
Significant benefits stemmed also from the regular use
of the VIES, VIES-on-the-web and the EMCS
systems even though their primary objective was to ensure taxes and duties are
collected properly. Tax administrations considered that they made detection of
irregularities faster, cooperation and monitoring more convenient and reaction
time shorter as compared to the previous paper-based procedure. With regard to the
EMCS system, the statistical analysis showed that the average time for
discharge of an excise movement (between validation of the electronic document
and the sending of the report of receipt at destination) was 6.8 days, which
was considered very short[15].

For the economic operators, VIES-on-the-web directly
reduced lead-time for validation of the VAT numbers of their trading partners,
who no longer had to use the intermediary of the national administration. 157
million validations took place within the application in one year alone. Assuming
each of these had to be dealt with by a five-minute telephone call, VIES-on-the-web
reduced compliance costs by an estimated EUR 160 million on the side
of national tax administrations and a similar amount for the economic
operators. Furthermore, as of January 2010 the VAT Refund electronic procedure
entered into operation, simplifying the refund process by allowing business to
directly apply for a VAT refund in the Member State of establishment for VAT
incurred in another Member States. While the evaluation concluded that it was
too early to assess the full impact of the application on the cost reduction
for businesses, the analysis of the surveys sent out to the tax and excise
officials in 2012 by the Commission with the objective of conducting a
cost-benefit analysis of the major IT systems supported by Fiscalis 2013, did
collect some preliminary indication from a number of Member States that the efficiency
of the administration had indeed increased. The evaluation furthermore
recommended that tax payers are specifically targeted in the programme’s
activities and evaluation (recommendation 7).
In relation to the EMCS, the system has also delivered a
number of administrative advantages for economic operators, including reduced
paper-based handling, faster conclusion of duty suspension procedures and the
integration of processing with existing computerised systems. These benefits
were particularly true for the larger businesses, trading frequently and having
bigger IT capacity, while the smaller ones, using the duty suspension
procedures sporadically, found it more difficult to adapt due to relatively
high technical and financial requirements (e.g. guarantee requirement) for
movements of duty suspended goods. 
In the area of direct taxation, the programme supported
the Tax Identification Number (TIN)-on-the-web application. This is a system providing
a web-enabled interface allowing end-users to verify Tax Identification Numbers
for any Member States, with a view to quickly identifying taxpayers and
facilitating the administration of their national tax affairs, or for
identifying taxpayers who invest in other EU countries. The evaluation
concluded that TIN-on-the-web application was underused, which made it
impossible to evaluate the sought for reduction in administrative burden.
However, the reasons for the low use are not programme-induced and stem from a
variety of factors, the main one being that there is no TIN at EU level, and
not all EU countries have or use them. Some countries have other identifiers,
which for legal or other reasons cannot be treated as TINs, while others do not
issue them automatically to all taxpayers. 

5.     
Efficiency 

A large proportion of the programme expenditure was
committed to the operation and support of the IT systems (approximately 75%),
of which the lion’s share was allocated to the CCN/CSI network. Considering
that CCN/CSI supports the exchange of information between the Member States for
all trans-European IT systems and allows all Member States equal participation
in exchange of information, this investment was deemed by the national
administrations necessary and highly valuable. 
Given that the CCN/CSI network was a platform common as
well to the Customs 2013 programme, the evaluation found that investing in this
network was not only pragmatic from the point of view of the IT operations, but
brought about economies of scale of a single IT architecture. While more
harmonisation between tax and customs processes is still possible (for example,
regarding the interoperability between EMCS and the customs systems) and
recommended to be improved (recommendation 6), the Commission and national
administrations aimed at increasing synergies and shared development of IT
modules, through organising joint projects groups between tax and customs
authorities. 
On the operational level further efficiency gains were
achieved in the implementation and operation of the IT systems by promoting
reuse of technology and developing common services. These included strategies
designed to promote cost savings such as a single methodology to manage the IT
systems, consolidation of data centres and shared web publishing environments
with Member States across the taxation areas. Moreover, to ensure efficient
development of functionality and operations support, the IT operations were
largely outsourced, with only little operational or development activity
in-house. 
Operational support to the Member States to help
implement and run the IT systems represented an important part of the Fiscal
2013 budget on IT spending, above 40%. The Commission worked closely with the
Member States to ensure maximum scrutiny and adequacy. This included the
development of common specifications and applications that could be applied in
each Member State as well as visits to the Member States in order to help
troubleshoot any issues or perform necessary connectivity tests. Conformance
testing was as one the areas which offered best value for money as the tools
developed centrally could be used by all Member States (e.g. the Self Service
Test System (SSTS) designed to allow Member States greater control to perform
their conformance testing). The evaluation suggested more central application
could be developed (recommendation 5).
The replies to the 2012 Commission survey on
cost-benefit analysis of the major IT systems supported by Fiscalis 2013, revealed
the difficulties the Member States had in calculating the cost of national
implementation; no Member State presented copy of existing national studies or
assessments while estimations from 17 Member States of costs related to the
setting up and running EMCS between 2007 and 2011 varied between EUR 1.1 m and
18.8 m. Even fewer Member States were able to monetise the benefits and the
evidence to this extent is highly anecdotal, e.g. one Member State reported 10%
increase in revenue collected in the year following the introduction of the
EMCS. However, there were positive answers with respect to the impact of the IT
systems on the efficiency of the administration, with majority of the Member
States considering that the efficiency of their administrations had improved
after introduction of the EMCS, VIES or VAT Refund. Anecdotal evidence suggests
that in the case of one Member State, the cost of implementing EMCS had more
than paid for itself due to the discovery of several high value fraud schemes.  
To further facilitate and streamline information
sharing, organisation of activities and networking, in 2012 the Commission
launched the Programme Information and Collaboration Space (PICS), to be used
by both the Fiscalis 2013 and its sister Customs 2013 programmes. It provided
the national administrations with a common working space where to exchange
information and collaborate online and was generally considered as a positive
move towards the more efficient use of resources. However, through evaluation
it became clear that the overall awareness of the tool’s function and use was
still low and its potential currently underexploited and a recommendation was
made to this extent (recommendation 3).        
As the Fiscalis 2013 programme operated mostly in a time
of economic austerity, the drive for maximum efficiency was strong amongst the
Commission and the participating countries. It brought the parties together to
yet more closely collaborate on joint development of common tools or national
applications or share best practices in IT solutions. 
In any case, the IT systems supported by the Fiscalis
2013 programme cannot be considered in isolation and with no regard to the
value of the very information they enable to flow. It is very difficult to
monetise the value of information exchange, as data on tax recovered or
reassessed is often inaccessible. However, the real value of the IT systems
should be seen through the prism of their high use and their role in
facilitating rapid and secure information exchange between the Member States. Information
exchange between all EU countries using IT systems supported by Fiscalis was
considered by stakeholders vital in order to enable the tax officials to better
monitor intra-EU transactions or movements, and assess associated tax due. 
Were similar systems to be developed individually on a
national level, their efficiency would be nowhere near the current levels, at
the expense of being less interoperable, less uniform and ultimately, less
effective. The set-up and subsequent running costs of such systems would also
be significantly higher if not prohibitive.     
Although joint actions accounted for a smaller share of
the total budget of Fiscalis 2013, the participating countries considered them
to be the unique value of the programme. Over 23,400 officials participated in
various seminars, workshops, project groups, training and multilateral
controls. The average cost per participant financed via the programme was just
under EUR 1,000, which the external evaluation considered very reasonable,
given that it included travel and subsistence expenses, as well as necessary
organisation costs, including linguistic support. As in the case of the IT
systems, the evaluation concluded that the value of information exchange
through and knowledge gained thanks to these activities is mostly unquantifiable,
with the greatest benefits laying in the sustainable human networks, common
understanding, interpretation and application of the EU law. 
The example of the multilateral controls illustrates
well the programme’s potential put against its costs. The reported amount of
tax due identified on the basis of approximately 85% of closed multilateral controls
– EUR 3.26 billion - translates into a ratio of almost EUR 1:1 350 (ratio
between EUR 2.41 million actually spent on all multilateral controls and EUR 3.26
billion of taxes due identified and reported). While the actual recuperation of
tax due is a matter of further national proceedings and this example by no
means should speak for the programme’s overall efficiency, it is a good
illustration of the possible economic benefits the programme can generate,
which outgrow easily its expenses.  

6.     
EU added value

In the context of the Fiscalis 2013 programme, the EU
added value is defined for the purpose of the final evaluation as the additional
gains stemming from acting at the EU-level as compared to a national
initiative, a multilateral or even another international initiative. To allow
for a clearer demonstration of EU added value, the evaluation assessed it
through the criteria of: (1) complementarity of the programme to the above
mentioned initiatives; (2) its overall contribution towards its objectives,
which were embedded in the broader tax objectives and shared with other
initiatives (e.g. fight against tax fraud); (3) reduction of administrative
cost and burden (e.g. through common IT platforms, guidelines, procedures,
etc.; cross-implementation of best practices identified in the course of the
programme’s activities; reduction of duplication and overlaps; synergies, etc.);
(4) trans-European nature of the tax cooperation and tax fraud best tackled
across, not within the Member States, and the values of a common administrative
culture and human networks created through the programme; and (5)
sustainability of results/impacts if the programme was to discontinue.

6.1.  
Complementarity of the Fiscalis 2013 programme to other national,
regional, international initiatives

The evaluation identified several national, regional and
international initiatives external to Fiscalis 2013 programme, aiming at enhancing
the exchange of tax information between certain countries, either on a
bilateral or multilateral basis. Overall, the evaluation concluded that, rather
than leading to overlaps, the Fiscalis 2013 programme complemented and allowed
for synergies between these initiatives.
On a national level, the programme predominantly allowed
for creation of synergies where both Fiscalis 2013 and the
national initiatives fed to and from each other to increase the sought for
effects. For example, some administrations had integrated information from the VIES
system into the workflow software of their tax officials, allowing for much
easier access and processing of information. Thanks to the built-in flexibility
and voluntary participation in the joint actions, the tax administrations used
the Fiscalis 2013 programme to support their national priorities, for example
through participation in, sometimes very, specific multilateral controls.
With regard to regional initiatives the Fiscalis 2013
programme played a similar supplementary role. The evaluation brought two
examples in: the close cooperation extending to tax issues between the Benelux countries, and the Nordic working group to fight tax evasion (NAIS). However, these
and similar initiatives were largely considered to be complementary
to the Fiscalis 2013 programme, as these other regional initiatives had a
different targeted coverage and scope[16].

Fiscalis 20103 programme operated in a similar context
as two main international organisations, which activities, objectives and
targeted audiences to some extent overlapped with the ones of Fiscalis, namely
the Organisation for Economic Co-operation and Development (OECD) and the Intra-European
Organisation for Tax Administrations (IOTA)[17].
Whereas the overlaps with OECD were negligible due to the organisation’s broad
mandate, the IOTA’s contribution to the results pursued also by the Fiscalis
2013 programme was clear. However, overlaps exist only as far as the Fiscalis
programme’s joint actions are concerned, e.g. seminars or workshops; none of
IOTA’s (or other regional) initiatives could substitute in any way the core
electronic information exchange with all countries facilitated by
Fiscalis 2013. Fiscalis 2013 was the only instrument out there with the sole
focus on the practical improvement of the tax systems in the internal market, making
the programme a unique, tailor-made solution to tackle cross-border tax issues
in the EU. 

6.2.  
Contribution to broader tax objectives 

In the 2010 Monti Report[18], the need for exchange
of tax information and cooperation between tax administrations was recognised
as one of the measures in the taxation area to improve functioning of the
internal market. The Commission 2012 Action Plan[19] to strengthen the fight
against tax fraud and tax evasion stressed furthermore the need to
ensure that the framework for administrative cooperation in the fields of VAT, direct
taxation and excise was fully implemented and applied. This fight has since
remained a key European priority. The Fiscalis 2013 programme fitted within
this framework well by providing the tax administrations with the very means to
effectively exchange information (e.g. through the VIES system, EMCS,
standardized tax e-forms, etc.) or pool expertise to cooperate on specific
tasks (e.g. through multilateral controls, EUROFISC platform, workshops,
seminars and other joint actions). 

6.3.  
Importance of EU cooperation in reducing of administrative
cost and burden 

The evaluation concluded that the Fiscalis 2013
programme allowed to reduce the administrative costs and burdens in three main
ways: (i) through standardising to some extent the exchange of
information between tax administration (e.g. through e-forms), (ii) by
providing platforms for secured exchange (i.e. the CCN/CSI with
all IT applications therein anchored), and (iii) by providing common IT
systems to be used directly by the tax administrations (e.g. the EMCS
or the VIES). Detailed description of the programme’s contribution to reducing
administrative cost and burden is presented in heading 4 of this report. The
stakeholders consulted within the evaluation were not able to identify any
national or international alternatives to Fiscalis 2013, which could have
delivered a similar or higher reduction of the administrative burden on
national administrations and economic operators. 

6.4.  
Trans-European nature of the tax cooperation and common
administrative culture

The Fiscalis 2013 effectiveness lays predominantly in
the programme’s pan-European approach and the cross-border
solutions it offers, which could have not been triggered from a
national level. These solutions at times consisted of centralised IT systems bringing
all participating countries to the same level, at times of higher level of
coordination and alignment of goals and expectations achieved thanks to the
joint actions. Although the programme did not aim to facilitate creation of a
common administrative culture (nor is such culture at the moment desired), it
allowed the tax officials to gradually converge in their approach to, understanding
of and cooperation with their counterparts from other Member States. The
scenario of achieving similar levels of cooperation acting individually and in
an uncoordinated fashion was commonly unconceivable by stakeholders. The
Commission’s role of a coordinator and facilitator was also recognised by
stakeholders and recommended to be continued (recommendation 4).     

6.5.  
Sustainability of results

The sustainability of results is analysed from the
perspective of discontinuing the programme as due to their nature, most of the
Fiscalis activities are not a one-off intervention and rely on its continuous
support. In the short term there was some confidence amongst the stakeholders
that part of the Fiscalis 2013’s effects would remain if the programme was
discontinued. These effects included the more noticeable achievements of the
programme such as the new skills or human networks. However, stakeholders
considered that these would not remain in the longer term as the
tax administrations operate in a complex and highly dynamic environment, with
changing national priorities, economic conditions, restructuring, etc. The participating
countries could formally organise activities similar to joint actions on their
own accord, practically however it was deemed unlikely to be able to secure the
necessary funding and coordinate such actions. 
Similar conclusions were reached by stakeholders in
relation to IT systems; their support, maintenance and development would be
very difficult to maintain at the current levels if they were to rely uniquely
on national funding, initiatives and organisation. In fact, the stakeholders
unanimously agreed that such systems would quickly become inoperable and
inadequate, with the direct consequence of quickly diminishing
information exchange, monitoring and control capacity, as well as increased
administrative costs and burden. It is an important argument when
bearing in mind that many of the IT systems are not just a ‘nice-to-haves’ but
they are actually underpinning legislation (e.g. the EMCS or the
requirements of the legislation on administrative cooperation) and their
discontinuance would put a strain on the compliance with the EU tax acquis. 
Finally, the evaluation concluded that without the
Fiscalis programme but given the emphasis on fight against cross-border tax
fraud and evasion, some Member States would likely cooperate closer through
bilateral or regional agreements, which could ultimately lead to asymmetry
in the Member States’ accesses to information and consequently facilitate
fraud and distort trade.

7.     
Contextual factors influencing the programme’s
performance

The evaluation, through the contribution analysis, also examined
the contextual factors, external to the programme and thus beyond its direct
control, which either hindered (inhibitors) or contributed (drivers) to the
programme’s achievements. The purpose of this exercise was not to precisely
assess the extent to which they have weighted on the programme’s achievements
but to identify them in order to shed some light on the conditions in which the
Fiscalis 2013 programme operated. The most important are presented below, which
were observed across many Member States. 
The evaluation found that knowledge management
strategies within national administrations, reflecting how national
administrations organised cooperation on multilateral controls (MLCs) and IT
systems as well as the division of responsibility for tasks related to Fiscalis
2013, contributed positively to the achievements of the programme. For example,
a horizontal organisation with few levels of management seems to have been
better adapted for a swifter and easier carrying out of multilateral controls
while close collaboration between the administration and the IT department
provided more flexibility and the ability to respond quickly and efficiently to
IT problems. 
Partly in the same context the evaluation revealed that
the responsibilities for tasks related to Fiscalis 2013 operations were not
always clearly assigned in the national administrations, which may have
negatively affected the programme’s coordination and overall implementation in
(some) participating countries. It related predominantly to the role of the National
Coordinators, who worked with different mandates, in different
organisational set-ups and with different resource constraints, which in some
cases might have impacted their ability to promote the programme and was
therefore recommended to be clarified (recommendation 2). 
The national IT systems were found to have
complemented the functionalities of the Fiscalis funded IT systems and
in such instances they mutually reinforced each other creating powerful
synergies, as it was the case with, for example, a Spanish tax payer
information system Zujar, which when used in conjunction with the VIES
system allowed for a quick cross-check on VAT transactions. On the other hand, where
the national systems were not inter-operable with the Fiscalis 2013 –funded IT systems,
the unexploited potential was instantly visible. For example, because the Dutch
Export Control System (ECS) was not integrated or connected to the EMCS, all
movements which ended outside the Netherlands had to be closed manually,
increasing workload and diminishing the real-life monitoring and control
capacity. 
One of the key inhibitors to realisation of the full
potential of Fiscalis 2013 was the economic crisis in the EU
throughout the duration of the programme. Even though the evaluation did not
identify any noticeable differences in the resources dedicated to specific tax
areas, the stakeholders largely underlined the overall pressure on resources
and drive towards efficiency. In practice, the budgetary austerity reduced the Member
States’ participation in programme activities and resources to implement national
components of the IT systems. The latter was particularly pronounced by
stakeholders.  
On the other hand however, the evaluation concluded that
the economic crisis increased the attention towards ensuring cost efficiency of
the activities and led to increased volume of information exchanged through the
programme due to Member States placing additional emphasis on revenue
collection.
Language barriers
were largely identified by stakeholders as a hampering factor, diminishing
effectiveness of either oral or written communication and information as well
as participation in joint actions. 
Awareness and knowledge of the Fiscalis 2013 programme was also seen as a factor clearly
influencing the levels of cooperation and information exchange. Whereas the
overall awareness and dissemination of the programme’s results were widespread,
majority of the stakeholders and potential beneficiaries knew only little or
very little of the programme. The evaluation also showed that IT systems were
often taken “for granted” by the participating countries, and that there was
little acknowledgement of the connection to Fiscalis, which ought to be looked
into (recommendation 1).  
Other contextual factors mentioned by stakeholders,
which either weighed less on the programme’s overall achievements or were only
mentioned anecdotally, included the selection criteria of
national officials attending joint actions, national legislation
prohibiting disclosure of certain information or use of certain voluntary
systems (e.g. the underused TIN-on-the-web application) some local
phenomena (e.g. growth in the number of cross-border workers between
increasing pressure on more exchange of information on direct taxes or
increased cross-border of trade in certain commodities which intensified the
use and utility of the EMCS). 
Las but not least, the evaluation mentioned as well the
importance influence, or co-existence, of other initiatives, notably
the operations of the IOTA, which was described at length in heading 6.

8.      Conclusions and recommendations

Although many factors are at play in the functioning of
the internal market, the evaluation concluded it likely that Fiscalis 2013 made
a contribution to better functioning of the internal market. It is considered
plausible that fraud and tax evasion was reduced and/or prevented, in turn
avoiding distortions of competition in the internal market. The identified
shortcomings staying under the control of the programme led to the relevant
recommendations. 
The key findings could be summarised as follows: 
a)     
the IT systems (i.e. EMCS, VIES
and the e-Forms for cooperation in direct taxation) directly
supported the implementation of the EU acquis for administrative cooperation in
taxation;
b)     
VIES
system supported national administrations in identifying fraud and became an
essential part of the tax administrations’ VAT toolbox used daily by tax
officials;
c)     
VIES-on-the-web directly reduced lead-time for validation of the VAT numbers of the
economic operators, leading to an estimated saving of EUR 160 million for tax
administrations and similar for the economic operators; 
d)    
EMCS made
the fraudulent behaviour more difficult, risky and costly, thanks to the real
time monitoring and instant verification of the authorised operators. The electronic
guarantees bonded with each transaction under the EMCS made it easier
for the tax official to help ensure that the tax was duly collected;  
e)     
standard e-Forms in the area of VAT and direct taxation helped the tax officials in
calculating the correct tax liability;
f)      
the e-Forms and CCN/CSI platform
streamlined, simplified and improved quality of the electronically exchanged
information;
g)     
the joint actions allowed the
national administrations to share their expertise and experience; exchange
views on interpretation, implementation and enforcement of the EU provisions;
better understand legislative and organisation set-ups of the different tax
administrations; and build highly valued human networks;
h)     
EUROFISC platform provided  tax officials with an important channel to promote and
facilitate multilateral and decentralised cooperation, permitting targeted and
swift actions to combat specific types of fraud;
i)       
Multilateral Controls allowed Member States to identify additional tax due of an approximate
value of EUR 3.26 billion and led, together with the provisions of automatic
exchange of information under the Savings Directive, to the creation of
a ‘compliance effect’ amongst taxpayers;
j)       
there is scarce quantitative information
available with regard to the costs and benefits of the IT systems deployed at
the national level, with cost estimates varying widely from 1.1 million and
18.8 million and the benefits (in terms of the value of the information
exchanged) difficult to monetise, but the overall efficiency of the IT systems
was judged positive by the stakeholders;
k)     
the Member States would have not been able to
individually develop and maintain more effective, efficient and inter-operable
IT systems;  
l)       
Fiscalis 2013 programme complemented and allowed
for synergies between other initiatives in tax cooperation at national,
regional and international level, with only a small level of overlap with
regard to joint actions; it was the only instrument tailored to the very needs
of the internal market and the only to provide the IT application;
m)    Fiscalis 2013 programme allowed to reduce the administrative costs
and burdens in three main ways: (i) through standardising
exchange of information (e.g. through e-Forms), (ii) by providing platforms for
secured exchange (i.e. the CCN/CSI), and (iii) by providing common
IT systems to be used directly by the tax administrations (e.g. the
EMCS or the VIES);
n)     
unsupported by the programme, the effects of
joint actions and IT systems would not remain in the long term;
On the basis of gathered evidence, the evaluators put
forward several recommendations with the view to improving the
programme’s operations and its potential. The recommendations are summarised
below and were broadly accepted by the steering group. The Commission will
undertake a dedicated exercise to address the recommendations and draw up an
action plan for their implementation and follow-up, taking into consideration
their character, influence on the programme and possible timeline for their
implementation (e.g. during the life of the programme or in the forthcoming
legislative cycle).   
 Nr. || Recommendation || Main responsible 
 1 || Work should be undertaken to raise awareness of (future) Fiscalis programmes, the objectives and the outputs. In particular the link between European IT systems and the funding provided by Fiscalis could be promoted. || European Commission and participating countries 
 2 || The programme should provide a description of the National Coordinator’s role and responsibilities, and participating countries should ensure that National Coordinators have sufficient support and resources to fulfil their role. || European Commission and participating countries 
 3 || The programme should continue to disseminate information on how the Personal Information and Collaboration Space (PICS) is intended to be used and what functionalities it has. || European Commission  
 4 || The Commission should continue to play an active role in facilitating collaboration on national IT applications between Member States. || European Commission and Member States 
 5 || The Commission should continue to develop central applications which can be used by all Member States. || European Commission and Member States 
 6 || The Commission and Member States should explore further integration between taxation and customs procedures. || European Commission and Member States 
 7 || Prospectively, Fiscalis should focus more on reducing burden on the taxpayers and increase programme activities targeting this objective with a view to support the improved functioning of the internal market. || European Commission and Member States 
The Commission appreciated the overall quality of the
external study supporting this evaluation and acknowledged the methodological
difficulties and efforts undertaken to mitigate them. The evaluation findings as
presented in this report were deemed credible and the conclusions accurately
drawn. The Fiscalis 2013 programme’s contribution to the better functioning of
the internal market, through increased capacity of tax administrations to
effectively and efficiently detect and prevent fraud, as well as implement the
EU tax legislation, can therefore be judged as significant. 
The final evaluation of the Fiscalis 2013 programme will
support future discussions on the scope and design of the post-2020 iteration
of the programme. More operational findings, such as improvements to the IT
systems and applications or broader dissemination of the programme’s results, will
be directly addressed in the course of the current programme Fiscalis 2020.  
[1]   Decision No 1482/2007/EC of the European Parliament and of the
Council of 11 December 2007 establishing a Community programme to improve the
operation of taxation systems in the internal market (Fiscalis 2013) and repealing
Decision No 2235/2002/EC;
[2]    Matthaeus-Tax (1993), Fiscalis 2002 (1998-2002), Fiscalis 2007
(2003-2007) and Fiscalis 2013 (2008-2013);
[3] http://ec.europa.eu/taxation_customs/resources/documents/common/publications/studies/fiscalis2013_final_evaluation.pdf
[4]    For the purpose of the evaluation, candidate and potential
candidate countries were treated as any other participating country, taking
their specific status into consideration whenever pertinent; 
[5]    COM(2014)71 final “Report from the Commission to the Council and
the European Parliament on the application of the Council Regulation (EU) No
904/2010 concerning administrative cooperation and combating fraud in the filed
of value added tax”;  
[6]    Council Directive 2003/48/EC on taxation of savings income in
the form of interest payments;
[7]    Carousel fraud involves goods being imported VAT-free from other
EU countries, but rather than being sold for consumption, they are then sold
through a series of companies before being exported again. Each company
illegally reclaims the VAT charged to it;  
[8]    This figure relates only to due taxes
identified through the operations of the multilateral controls only;
[9]    The content of the exchanged messages remains a matter of
confidential exchange between the Member States to which Commission is not
privy;
[10]   Council Regulation 904/2010 on administrative cooperation and
combating fraud in the field of VAT;
[11]   Council Regulation (EU) 389/2012 on administrative cooperation in
the field of excise duties and Commission Regulation (EC) 684/2009 implementing
Council Directive 2008/118/EC as regards the computerised procedures for the
movement of excise goods under suspension of excise duty;
[12]   Council Regulation 904/2010;
[13]   Council Directive 2011/16/EU on administrative cooperation in the
field of taxation;
[14]   COM(2013)815 final, “Report from the Commission to the European
Parliament and the Council on the functioning of the arrangements for the
computerised supervision of excise movements under duty suspension and on the
application of the administrative cooperation rules in the area of excise
duties, in accordance with Article 8(3) of Decision No 1152/2003/EC, Article
45(1) of Directive 2008/118/EC, Article 35(1) of Council Regulation 9EC) No
2073/2004 and Council Regulation 9EU) No 389/2012;
[15]   COM(2013)850 final; 
[16]   The objective of NAIS was to enteri into agreements for the
targeted exchange of information with many other countries, including so-called
“tax havens” as well as some Member States. However, this collaboration was
aimed at facilitating information exchange with targeted countries;
[17]   The Intra-European Organisation of Tax Administrations (IOTA), is
a non profit intergovernmental Organisation, which provides a forum to assist
members in the European countries to improve tax administrations. It has 46
members;
[18]   A New Strategy for the Single Market: At the Service of Europe’s
Economy and Society, Mario Monti, 9th May 2010, p. 80;
[19]   Communication from the
Commission to the European Parliament and the Council, An Action Plan to
strengthen the fight against tax fraud and tax evasion, SWD(2012) 403 final;