Payment service providers and the fight against e-commerce VAT fraud

24-10-2019

This briefing analyses the quality of the IA accompanying the Commission’s proposal to transmit payment service providers’ data to the national tax authorities of the EU Member States in order to combat cross-border e-commerce VAT fraud. The IA focuses on the economic impacts, namely the potential recovery of VAT loss by Member States, which is expected to outweigh the costs of the initiative (even though benefits and costs could not be quantified with certainty). Regional divergences are acknowledged in the IA, but not assessed. The IA also admits that a key assumption, the improved cooperation with third countries, remains uncertain (it could imply counterproductive trade diversion towards extra-EU areas).

This briefing analyses the quality of the IA accompanying the Commission’s proposal to transmit payment service providers’ data to the national tax authorities of the EU Member States in order to combat cross-border e-commerce VAT fraud. The IA focuses on the economic impacts, namely the potential recovery of VAT loss by Member States, which is expected to outweigh the costs of the initiative (even though benefits and costs could not be quantified with certainty). Regional divergences are acknowledged in the IA, but not assessed. The IA also admits that a key assumption, the improved cooperation with third countries, remains uncertain (it could imply counterproductive trade diversion towards extra-EU areas).