ECOFIN Agrees To Eurofisc

by Ulrika Lomas, Tax-News.com, Brussels

09 October 2008

Apart from setting out an EU-wide scheme to increase depositor protection across the Union, this week's ECOFIN meeting in Luxembourg approved proposed guidelines for an EU-wide system to combat VAT fraud, to be called Eurofisc. The guidelines are as follows:

• Eurofisc would be a decentralised network for the exchange of information on VAT fraud between the Member States, with each of its tasks being coordinated;
• Eurofisc would observe four general principles: the freedom for each Member State to participate in any of the network's tasks; active participation in the exchange of information; the confidentiality of the information exchanged; no additional burden on operators;
• Eurofisc would not have legal personality. Its functioning would be organised by agreement of the participating Member States, with the support of the Commission. Its tasks would be carried out by liaison officials who were experts in tax fraud. Their work would be led by coordinators who they would designate amongst themselves. Eurofisc's activity would be regularly evaluated by the Member States;
• Eurofisc's tasks would be initially to provide a multilateral early warning mechanism for combating VAT fraud, and to coordinate the exchange of information and the work of participating Member States in acting on warnings received.

ECOFIN noted that the Commission intended to present a proposal in the autumn of 2008 on the recasting of Regulation (EC) No 1798/2003 of 7 October 2003, and invited the Commission to include in that proposal provisions to allow Eurofisc to be established in the near future in accordance with those guidelines, while respecting the instruments of administrative cooperation mentioned in the Regulation.

The Commission had previously presented a range of ideas that would contribute to improving the fight against VAT fraud, in particular recognising that organizing for rapid response and exchange of information was a major tool for Member States. It referred to the mechanism developed by the Belgian tax administration in which several Member States participate with satisfaction. It indicated that it was open to consideration of an informal structure, composed of officials from national tax administrations, to facilitate the exchange of information between national tax authorities.

Some Member States think that officials in the Eurofisc network should be able to initiate, accept or coordinate targeted multilateral checks. In the longer term some delegations also want Eurofisc to develop a joint risk analysis capacity for those Member States which are prepared to allow access to their databases (the VIES system).

Tthe Commission is understood to be going to present a proposal in November 2008 for the recasting of Regulation (EC) No 1798/2003 of 7 October 2003 on administrative cooperation in the field of VAT, including provisions to enable Eurofisc to function properly.

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