COMMISSION DECISION of 24 July 1998 on the treatment for national accounts purposes of VAT fraud (the discrepancies between theoretical VAT receipts and actual VAT receipts) (notified under document number C(1998) 2202) (Text with EEA relevance) (98/527/EC, Euratom)
THE COMMISSION OF THE EUROPEAN COMMUNITIES
,
Having regard to the Treaty establishing the European Community,
Having regard to the Treaty establishing the European Atomic Energy Community,
Having regard to Council Directive 89/130/EEC, Euratom, of 13 February 1989 on the harmonisation of the compilation of gross national product at market prices (1), and in particular Article 1 thereof,
Whereas Commission Decision 94/168/EC, Euratom, of 22 February 1994 on measures to be taken for the implementation of Council Directive 89/130/EEC, Euratom on the harmonization of the compilation of gross national product at market prices (2), relates in particular to tax evasion but does not explicitly describe how VAT evasion should be treated; whereas it is therefore appropriate to describe how such evasion should be treated;
Whereas, in order to ensure the exhaustiveness of their GDP and GNP estimates in accordance with Directive 89/130/EEC, Euratom, the Member States need to adjust those estimates so as to take VAT evasion into account;
Whereas such adjustment relates to that component of the discrepancies between theoretical VAT receipts and actual VAT receipts which is attributable to evasion not involving the connivance of the buyer ('without complicity`);
Whereas the measures provided for in this Decision are compatible with the opinion of the committee set up by Article 6 of Directive 89/130/EEC, Euratom,
The Member States shall calculate the value of VAT evasion 'without complicity` by applying the methods set out in the Annex to this Decision.
For the purposes of the above-mentioned calculation, the Member States shall determine theoretical VAT receipts and actual VAT receipts and calculate the discrepancy between these two amounts, by applying the following formula:
Evasion 'without complicity` = Theoretical VAT receipts less actual VAT receipts less time differences less insolvencies less missing revenue (evasion 'with complicity`)
The Member States shall adjust, if necessary, the amount of value added included in their GDP and GNP estimates made in accordance with Directive 89/130/EEC, Euratom by adding to it the value, calculated using the above formula, of evasion 'without complicity`.
In order to make the adjustment described in Article 1, the Member States may apply a method which is equivalent to that described in the first subparagraph of Article 1, and which produces comparable results.
The Member States shall, no later than 1 October 1998, provide the Commission with an explanation of the sources and methods applied and state the value of the adjustments made. The Commission shall, in accordance with Article 19 of Council Regulation (EEC, Euratom) No 1552/89 (3), examine the validity of the sources and methods used and the adjustments made, and the comparability of the results obtained, particularly in cases where, in accordance with Article 2, the method described in the first subparagraph of Article 1 has not been used.
The time limit for the new Member States (Austria, Finland and Sweden) is fixed at 1 October 1999.
If a Member State can demonstrate to the Commission that the equivalent calculation is already implicit in its accounts, Article 1 shall have no effect. Any Member State wishing to follow this route shall supply full documentation to the Commission by 1 October 1998 (for Austria, Finland and Sweden: 1 October 1999).
The Commission shall inform the GNP Committee on the outcome of the implementation of this Decision and, in particular, on the methods used by the Member States.
This Decision is addressed to the Member States.