EU Green Lights E-Commerce Transaction Reporting Rules

by Ulrika Lomas, Tax-News.com, Brussels

20 February 2020

The European Council has approved new rules for the exchange of VAT payment data relating to cross-border e-commerce transactions.

On February 18, 2020, the Council adopted a set of rules designed to facilitate the detection of tax fraud in cross-border e-commerce transactions.

The new measures will enable EU member states to collect, in a harmonized way, the records made electronically available by payment service providers, such as banks. A central electronic system will be set up for the storage of the payment information and for the further processing of this information by national anti-fraud officials.

The changes include amendments to the VAT directive to establish requirements on service providers to keep records of cross-border payments related to e-commerce. This data will then be made available to national tax authorities under strict conditions.

Amendments will also be made to a regulation on administrative cooperation in the area of VAT. This will set out the details of how national authorities will cooperate to detect VAT fraud and control compliance with VAT obligations.

The new measures will apply as of January 1, 2024. They are intended to complement a new VAT regulatory framework for e-commerce that will enter into force in January 2021. The framework will introduce new VAT obligations for online marketplaces and simplified VAT compliance rules for online businesses.

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