EU: Implementing regulation on VAT and e-commerce transactions; guidance for payment service providers
A regulation regarding value added tax (VAT) and how payment service providers are to report data about e-commerce transactions has been adopted.
Guidance for payment service providers
The European Commission today reported that a regulation regarding value added tax (VAT) and how payment service providers are to report data about e-commerce transactions has been adopted.
Read the implementing regulation [PDF 251 KB]
According to an EC release (6 April 2022), the regulation:
- Provides guidance for payment service providers for reporting payment data in a harmonized format
- Sets out the main function of the Central Electronic System of Payment (CESOP)—an EU-financed central database
- Lists the responsibilities of the EC and EU Member States regarding the management of the system, access to the data, and security and personal data protection
CESOP will go live 1 January 2024. The EC reported that CESOP will only be accessed and operated by an “EU network of VAT fraud experts” with an aim to detect VAT fraud in e-commerce.
A legislative package adopted in February 2020 aimed to collect payment data to address VAT fraud in e-commerce (estimated to be approximately €5 billion in 2015). It was expected that the creation of CESOP would allow for the collection, storage, and processing of all payment data for the benefit of EU Member States.
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