The European Commission at the end of 2018 released two documents regarding the exchange of value added tax (VAT)-relevant payment data:
These two texts were adopted during the ECOFIN meeting of 8 November 2019. Therefore, EU Member States will be required to transpose the directive into their national laws before 31 December 2023.
The European Commission’s position has been that the growing importance of e-commerce facilitates VAT fraud. Therefore, it is necessary to provide a more efficient exchange of information for payment transactions. Because the majority of online purchases made by consumers are executed through payment service providers, it is believed that the responsibility of collecting the required information must rest with payment service providers.
According to the proposal, as soon as there are more than 25 cross-border payment transactions per quarter and payee, the payee’s payment service providers must collect, transmit, and retain for three years certain data—including items such as the payee’s business name, VAT identification number, other identifier which unambiguously identifies the payee and the location, and the identification of the payment transaction and payment refunds. This information must then be made available to EU Member States’ national authorities that in turn will transfer it to the future central electronic system of payment information (and that system will in turn centralize the data and forward it to Eurofisc officers who can then determine if there is any e-commerce-related VAT fraud).
Payment service providers have raised several concerns about the amount of information to be collected and recorded.
Read a November 2019 report prepared by the KPMG member firm in Luxembourg
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