EC Puts Forward Proposals To Improve Prevention Of Excise Duty Fraud

by Ulrika Lomas, for LawAndTax-News.com, Brussels

13 January 2004

The European Commission last week put forward new proposals designed to increase cooperation between EU member states with regard to the collection of excise duties on alcohol, tobacco, and energy products, and to reduce duty fraud in these areas.

According to the EC, the proposed regulations would ensure more direct contacts between local tax offices of Member States, so as to speed up information flows; establish clearer and more binding rules on cooperation between Member States; require more automatic and spontaneous information exchange (as opposed to information exchange on request); and improve the systems in place for the transmission of information.

"This proposal would put tax authorities in a better position to combat the enormous amount of cross-border fraud that occurs in the field of excise duties," Taxation Commissioner, Frits Bolkestein explained, continuing:

"The European Commission wants to support member states' efforts to tackle fraud and ensure that the freedom that individuals and businesses must enjoy to purchase and trade goods across borders within the Internal Market does not give rise to tax evasion as well as competitive problems for legitimate traders."

The regulations proposed by the EC are, in particular, designed to:

• ensure more direct contacts between local offices of Member States, while giving central liaison offices a role in overseeing this decentralised co-operation;
• establish a three-month time limit within which Member States would have to respond to information requests from each other;
• formalise the procedures whereby officials from one Member State could carry out investigations in another;
• establish procedures for simultaneous audits by officials from two or more Member States;
• introduce an obligation for automatic information exchange, without prior request, in cases where there is, or there is a risk of, serious fraud in a Member State;
• lay down rules concerning time limits for storage and concerning how information held should be exchanged;
• provide for transmission of statistical information to the Commission so as to allow the Commission to play a coordinating and facilitating role; and
• provide for information exchange with non-EU countries.

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