Administrative cooperation in the field of taxation
Directive 2011/16/EU on cooperation between EU countries’ tax administrations lays down the rules and procedures that EU countries’ national authorities must apply when exchanging information on tax matters.
The legislation applies to all taxes apart from the following:
value added tax and customs duties;
excise duties covered by other EU legislation or cooperation procedures;
compulsory social security contributions payable to an individual’s home country;
fees for certificates and other documents issued by public authorities;
contractual dues, such as public utility bills.
The relevant national authority establishes a central liaison office whose role it is to:
maintain contact with similar bodies in other EU countries, either directly or through designated departments and officials;
process requests for information.
Requests for information must be:
confirmed, if possible electronically, within 7 working days at the latest;
answered as quickly as possible and within 6 months at the latest.
Since 1 January 2014, national authorities must, at least once a year, automatically provide their counterparts with the following mandatory information on residents in another EU country:
life insurance schemes,
ownership of, and income from, immovable property.
As of 2017, national authorities must automatically provide their counterparts with information on financial accounts held by residents in another EU country and on cross-border rulings.
As of 2018, national authorities must automatically provide their counterparts with information on country-by-country reports and they must be given access to anti-money laundering information.
National authorities must spontaneously provide information to counterparts elsewhere in the EU as soon as possible and no later than 1 month after it becomes available, if:
they believe there may be a tax loss in another EU country;
a person in one country receives a tax reduction or exemption which would increase their tax liability in another;
business dealings between two people in different countries could lead to tax savings for either or for both;
artificial profit transfers within groups of enterprises could lead to tax savings;
they receive information from another authority which could be relevant in assessing their tax liability.
in two or more EU countries may agree to carry out simultaneous controls of taxpayers in which they both have an interest;
asked to provide information may request feedback from those using it — this should be provided within 3 months;
receiving information from a non-EU country may share this with their EU counterparts if they consider it to be of use.
All information shared between national authorities is subject to official secrecy.
As of 1 January 2018, national authorities must annually provide the European Commission with data on the volume of automatic exchanges of information and, where possible, must assess the costs and benefits.
It entered into force on 11 March 2011. It has been applicable in the EU countries from 1 January 2013.
Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC (OJ L 64, 11.3.2011, pp. 1-12)
Successive amendments to Directive 2011/16/EU have been incorporated into the original document. This consolidated version is of documentary value only.
Council Directive (EU) 2016/2258 of 6 December 2016 amending Directive 2011/16/EU as regards access to anti-money-laundering information by tax authorities (OJ L 342, 16.12.2016, pp. 1-3)
Council Directive (EU) 2016/881 of 25 May 2016 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation (OJ L 146, 3.6.2016, pp. 8-21)
Council Directive (EU) 2015/2376 of 8 December 2015 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation (OJ L 332, 18.12.2015, pp. 1-10)
Council Directive 2014/107/EU of 9 December 2014 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation (OJ L 359, 16.12.2014, pp. 1-29)
Administrative cooperation in the field of excise duties
Regulation (EU) No 389/2012 on administrative cooperation in the field of excise duties lays down rules on the exchange of information between EU countries through more direct contact between national competent authorities. This ensures the correct application of legislation on excise duties* and, as a consequence, speeds up their collection and improves national controls on the revenue generated.
The computerised Excise Movement and Control System (EMCS) supervises the cross-border movements of excise goods with suspension of excise duty, allowing for the easy and fast collection of duties on the excise goods concerned (alcohol, tobacco and energy products).
The relevant national authority establishes a central liaison office. Its role is to:
maintain contact with similar bodies in other EU countries, either directly or through designated departments and officials;
automatically exchange information where the law is, or is suspected of, being broken in another EU country;
offer information spontaneously without any prior request if this could ensure excise legislation is being correctly applied;
maintain an electronic database containing national registers;
keep records from national registers on the movement of excise goods inside the EU for at least 5 years;
ensure the information communicated or collected is covered by official secrecy.
Requests for information should be answered as soon as possible and no later than 3 months after being received.2 or more EU countries may agree to carry out simultaneous controls together to ensure excise legislation is being correctly applied.
computerises the movement and surveillance of goods subject to excise duty;
uses standard formats to exchange information;
simplifies communication and provides standard questions and answers in all official EU languages.
EU countries and the European Commission regularly monitor the way legislation is being implemented.
Excise duties: excise duties are indirect taxes on the sale or use of specific products, such as alcohol, tobacco and energy. The revenue from these goes entirely to the country to which they are paid.
Council Regulation (EU) No 389/2012 of 2 May 2012 on administrative cooperation in the field of excise duties and repealing Regulation (EC) No 2073/2004 (OJ L 121, 8.5.2012, pp. 1-15)
Successive amendments to Regulation (EU) No 389/2012 have been incorporated into the original document. This consolidated version is of documentary value only.
Cooperation on VAT
Regulation (EU) No 904/2010 on administrative cooperation and combating fraud in the field of value added tax sets out procedures allowing EU countries’ authorities to work together and share information on value added tax (VAT) and to combat VAT fraud. It thus ensures that:
VAT is assessed and applied correctly;
fraud in VAT is detected and prevented;
VAT revenue is protected.
Single central liaison office
EU countries each designate a central liaison office as a contact point for the other EU countries and the European Commission. The central liaison office must keep a list of designated officials and liaison departments who can share information with their counterparts in other EU countries. Where officials or liaison departments receive a request or reply to a request to send information, they must inform their central liaison office.
Countries share information using a standard form. Requested authorities must reply to requesting authorities within 3 months of receiving a request, or within 1 month if they already have the information available.
Certain information is shared automatically when:
information from the EU country of origin is essential for the control system of the EU country of destination where taxation will take place;
there is reason to believe that there has been or will be a breach of VAT legislation in the EU country of destination;
there is a risk of tax loss in the EU country of destination.
EU countries may also share information spontaneously and may request feedback from the countries with which it is shared.
EU countries may refuse to provide information where:
requests for information within a specific period from the requesting authority impose a disproportionate burden;
the usual sources of information have not been exhausted by the requesting authority;
it would lead to the disclosure of a commercial, industrial or professional secret or it is against public policy.
Each EU country must store the following up-to-date information in an electronic system for at least 5 years starting from the end of the first calendar year in which access to it is granted, by automated means, to the other EU countries:
information provided in the recapitulative statements submitted by taxable persons identified for VAT purposes;
data on persons to whom the EU country has issued a VAT identification number;
data on VAT identification numbers that have become invalid;
information on non-established taxable persons.
EU countries forward applications for VAT refunds they receive from taxable persons established in other EU countries to the authorities of the EU countries of refund concerned. This is done electronically within 15 days from the date of receipt of the application. The authorities of the EU countries of refund must notify the authorities of the other EU countries if:
they require additional electronic coded information on the nature and services of the applicants; or
if they require the applicants to provide a description of their business activities by using harmonised codes.
Provided that the assistance arrangements with the non-EU country in question allow it, the competent authority of an EU country may forward information it receives from that country to EU countries that request it and to any other EU country to which it may be of interest. EU countries’ authorities may forward information to non-EU countries if:
the EU country from where it originates consents;
the non-EU country in question has agreed to cooperate in gathering evidence of irregular transactions that may breach VAT legislation.
Fighting VAT fraud
The regulation establishes Eurofisc, a network of anti-fraud experts, which allows EU countries to exchange early warnings on businesses suspected of being involved in VAT fraud.
As part of a package of measures to modernise the EU’s VAT system, and to adapt it to EU cross-border business to consumer e-commerce, Regulation (EU) 2017/2454 amends Regulation (EU) No 904/2010 introducing rules that will increase administrative cooperation between EU countries. The 2017 amending regulation ensures that supplies of services and distance sales of goods under Directive (EU) 2017/2455 (which, in turn, amends Directives 2006/112/EC and 2009/132/EC) are covered, and applies from January 2021.
Among other things, the regulation requires that:
the identification number under which VAT is paid is provided in advance to allow customs authorities to check it is valid when importing goods;
requests for records and administrative enquiries made by EU countries to taxable persons will be coordinated by the country of identification*.
Council Regulation (EU) No 904/2010 of 7 October 2010 on administrative cooperation and combating fraud in the field of value added tax (OJ L 268, 12.10.2010, pp. 1–18)
Successive amendments to Regulation (EU) No 904/2010 have been incorporated in the original text. This consolidated version is of documentary value only.
Council Regulation (EU) 2018/1541 of 2 October 2018 amending Regulations (EU) No 904/2010 and (EU) 2017/2454 as regards measures to strengthen administrative cooperation in the field of value added tax (OJ L 259, 16.10.2018, pp. 1–11)
Council Regulation (EU) 2017/2454 of 5 December 2017 amending Regulation (EU) No 904/2010 on administrative cooperation and combating fraud in the field of value added tax (OJ L 348, 29.12.2017, pp. 1-6)
Council Directive (EU) 2017/2455 of 5 December 2017 amending Directive 2006/112/EC and Directive 2009/132/EC as regards certain value added tax obligations for supplies of services and distance sales of goods (OJ L 348, 29.12.2017, pp. 7-22)
Council Directive 2009/132/EC of 19 October 2009 determining the scope of Article 143(b) and (c) of Directive 2006/112/EC as regards exemption from value added tax on the final importation of certain goods (OJ L 292, 10.11.2009, pp. 5-30)
Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ L 347, 11.12.2006, pp. 1-118)
Recovery of claims relating to taxes, duties and other measures
Directive 2010/24/EU encouraging mutual assistance between EU countries for the recovery of claims relating to taxes, duties and other measures aims to combat tax evasion by ensuring that EU countries work more closely together (they must provide assistance) with regard to the recovery of claims relating to taxes, duties and related measures levied in another EU country.
This directive applies to claims relating to:
all taxes and duties levied by or on behalf of any EU country or on behalf of the EU as a whole;
refunds, interventions and other measures which contribute to the total or partial financing of the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD);
levies and other duties on the sugar sector market.
EU countries were to notify the European Commission of their competent national authority or authorities by 20 May 2010 for publication in the Official Journal of the EU. Each competent authority must designate a central liaison office which will be responsible for contacts with other EU countries in this field.
Request for information
A competent authority is obliged to provide another competent authority with any information relevant to that applicant authority in the recovery of its claims, except if:
the requested authority would not be able to obtain such information for the recovery of similar claims occurring in its own country;
the information would disclose any commercial, industrial or professional secrets;
the disclosure of the information would put at risk the security or contravene the public policy of the requested EU country.
Request for notification of documents
When requested for notification of documents relating to claims, the requested authority must notify to the addressee all documents which emanate from the applicant EU country relating to a claim or to its recovery.
The request for notification must include relevant information, such as the name and address of the addressee, the purpose of the notification, a description of the nature and amount of the claim, and the contact details of the offices responsible for the documents and for obtaining further information.
Any available appropriate recovery procedures must be applied before the applicant authority makes a request for recovery, except where:
it is evident that there are insufficient or no assets for recovery in the applicant EU country but that the person concerned has the necessary assets in the requested EU country;
it would result in disproportionate difficulty.
Any request for recovery must be accompanied by a uniform instrument permitting enforcement in the requested EU country.
The requested competent authority will employ the powers and procedures provided under the laws, regulations or administrative provisions of the requested EU country regarding claims on the same or similar tax or duty. If the requested authority does not consider that the same or similar taxes or duties are applicable in the requested EU country, it shall instead apply the rules relating to tax levied on personal income.
Disputes relating to the claim, the initial or uniform instrument permitting enforcement, and the validity of a notification by the applicant authority are the responsibility of the competent authorities of the applicant EU country. Disputes relating to the validity of a notification made by a competent authority of the requested EU country will be brought before the competent authority of that EU country.
The applicant authority may make a request for recovery of a contested claim. If the claim is successful, the applicant authority will be responsible for the reimbursement of the amount recovered, in addition to any compensation due.
Amendment or withdrawal of the request for recovery assistance
The applicant authority must immediately notify the requested authority of any amendment to or withdrawal of its request for recovery, detailing the reasons for amendment or withdrawal.
Request for precautionary measures
Where the claim or the instrument permitting enforcement in the applicant EU country is contested at the time when the request is made, the requested authority will take precautionary measures, in accordance with its national law, to ensure recovery when requested to do so by the applicant authority.
Limits to the requested authority’s obligations
The requested authority is not obliged to grant the recovery assistance if:
recovery of the claim would result in serious economic or social difficulties in the requested EU country;
the initial request for assistance relates to claims more than 5 years old;
the total sum of the claims is less than EUR 1 500.
Any information and documents disclosed under this directive will be covered by the obligation of official secrecy and will therefore be protected under the appropriate national law of the EU country which received it.
This directive repeals Directive 2008/55/EC from 1 January 2012. References to the repealed directive will be understood as references to this directive.
It has applied since 20 April 2010. EU countries had to incorporate it into national law by 31 December 2011.
Council Directive 2010/24/EU of 16 March 2010 concerning mutual assistance for the recovery of claims relating to taxes, duties and other measures (OJ L 84, 31.3.2010, pp. 1-12)