Explanatory Memorandum to COM(2009)28 - Mutual assistance for the recovery of claims relating to taxes, duties and other measures - Main contents
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| dossier | COM(2009)28 - Mutual assistance for the recovery of claims relating to taxes, duties and other measures. |
|---|---|
| source | COM(2009)28  |
| date | 02-02-2009 |
Grounds for and objectives of the proposal Arrangements for mutual recovery assistance were first set out in Council Directive 1976/308/EEC of 15 March 1976, as codified by Council Directive 2008/55/EC of 26 May 2008, on mutual assistance for the recovery of claims relating to certain levies, duties, taxes and other measures. This instrument, however, has proved insufficient to meet the requirements of the internal market as it has evolved over the last 30 years. As evidenced by the case law of the Court of Justice, an efficient cooperation and recovery system in the field of taxation proves to be one of the cornerstones of the internal market, in that it allows and incites Member States to remove discriminatory protective measures in transfrontier transactions which they have adopted for fear of tax evasion and tax losses. Member States have time and again deplored the insufficiency (slowness, disparity, lack of coordination, intransparency) of the legal measures at their disposal under Directive 1976/308/EEC. It therefore appears now necessary to make provisions for an improved recovery assistance system within the internal market which will guarantee swift, efficient and uniform recovery assistance procedures among Member States.
General context National provisions on recovery are applicable only within national territories. It is not possible for administrative authorities themselves to recover taxes outside the territory of their own Member State. At the same time, the mobility of persons and capital is increasing, and fraudsters take advantage of the territorial limitation of the authorities' competences to organise insolvencies in countries where they have tax debts. The free movement provisions of the EC Treaty make it difficult for Member States to ask for guarantees for the payment of taxes due on their territory. Member States are therefore increasingly requesting the recovery assistance of other Member States. (In 2003, Member States received 3355 assistance requests; by 2007, this was up to 11794). However, the amounts effectively recovered only amount to approximately 5 % of the amounts for which recovery assistance is requested. Under these circumstances of an ever increasing need for recovery assistance but a poor result reached so far, it is absolutely necessary to reform drastically the functioning of the mutual recovery assistance. To enable tax officials to cope with the increased number of requests, it is necessary to adopt new rules that are easier to apply, and to facilitate the use of the assistance instruments in practice. To boost the recovery ratio, it is necessary to change the conditions for assistance requests and to develop a system of spontaneous information exchange. Such a reform is particularly important in the fight against VAT fraud, of which the volume leads to major distortions of the normal competition conditions in the internal market, and which affects largely the Member States' and the Community's budget. The effect of Directive 2000/65/EC, which abolished the possibility of requesting designated VAT representatives, and the expansion of VAT fraud - especially the so-called carousel fraud - has led to a situation where 57,50 % of all recovery requests relate to VAT claims (situation in 2007). At the same time, the proposed extension of the scope of the new legislation - to cover all taxes and duties and liability claims for losses caused by non-payment of the taxes and duties - also implies the need for a new organisation of the mutual recovery assistance between Member States.
Existing provisions in the area of the proposal The existing legislation is based on Directive 1976/308/EEC of 15 March 1976, which was codified by Directive 2008/55/EC of 26 May 2008 on mutual assistance for the recovery of claims relating to certain levies, duties, taxes and other measures. The scope of the existing legislation is limited. The existing legislation does not provide for uniform instruments for enforcement or precautionary measures. The current problems linked to the recognition and translation of instruments emanating from another Member State are a major cause of the inefficiency of the present assistance rules. Moreover, under the existing provisions, requests for mutual assistance are subject to strict conditions which have a negative impact on the recovery effect.
Consistency with the other policies and objectives of the Union Not applicable.
Consultation of interested parties
Consultation methods, main sectors targeted and general profile of respondents The Member States were consulted by means of a questionnaire and discussions held in the Recovery Committee.
Summary of responses and how they have been taken into account The general opinion of Member States is that the existing recovery assistance needs to be improved and strengthened. It was suggested to extend the scope of the EC legislation, so as to avoid tax administrations having to use different agreements, and to extend the opportunities for requesting assistance and to facilitate the use of mutual assistance. These suggestions have been taken up in the proposal.
There was no need for external expertise.
Impact assessment No impact assessment has been made for this proposal. A legal act is necessary to solve the problems caused by the territorial limitation of the national authorities' recovery competences. The other option considered was to amend the existing Directive. However, this was not considered appropriate, given the size and the impact of the proposed reform.
Contents
Summary of the proposed action The Commission is proposing a new Council Directive on mutual assistance for the recovery of taxes, duties and other measures. The scope of the mutual recovery assistance should be extended to other taxes and duties than those already covered now, as the non-payment of any kind of tax or duty affects the proper functioning of the internal market. The scope should also be extended to compulsory social security contributions. Uniform instruments permitting enforcement or precautionary measures need to be adopted, in order to avoid problems of recognition and translation of instruments emanating from another Member State. For the same reason, it is also appropriate to adopt a standard form for the notification of documents, relating to these claims, on the territory of another Member State. In order to obtain information relevant for recovery purposes, national officials should have the competence to act on the territory of other Member States, and a system of spontaneous information exchange should be developed. The conditions for requesting assistance should become less strict, at least in certain circumstances, in order to improve the recovery chances. The adoption of common request forms should also facilitate the assistance. Other revisions are likewise aimed at facilitating assistance in practice and making the legislation easier to apply.
Legal basis Articles 93 and 94 of the EC Treaty.
Subsidiarity principle The subsidiarity principle applies insofar as the proposal does not fall under the exclusive competence of the Community.
The objectives of the proposal cannot be sufficiently achieved by the Member States for the following reason(s).
The objectives of the proposal cannot be sufficiently achieved by the individual Member States for the following reason(s): in order to establish an efficient recovery assistance system, common rules and uniform instruments have to be adopted. Furthermore, as confirmed by many Commission documents, the fight against tax fraud requires action at EU level.
Mutual recovery assistance between these authorities could also be based on bilateral or multilateral agreements. Such provisions are normally incorporated in double taxation agreements. However, their scope is generally limited to income taxes, while recovery assistance should also be granted for other taxes and duties. Furthermore, individual actions of Member States do not suffice to fight against transnational tax fraud.
Community action will better achieve the objectives of the proposal for the following reason(s).
Community action will be more effective, thanks to the adoption of a global set of binding EU rules, applying to all types of taxes and other duties. Applying the same instruments and forms, the same conditions and the same methods for mutual recovery assistance with regard to all these taxes and duties facilitates the work of the authorities and improves the results of this assistance.
The authorities concerned will be able to treat requests easier and faster and to exchange relevant information more rapidly. They will have more possibilities to apply recovery or precautionary measures.
The EC legislation on mutual recovery assistance deals with the relationship between the national authorities. However, the proposal does not affect the Member States' competence to determine the enforcement and precautionary measures available under their internal legislation.
The proposal therefore complies with the subsidiarity principle.
Proportionality principle The proposal complies with the proportionality principle for the following reason(s).
The adoption of common rules on mutual recovery assistance for all kind of taxes constitutes in itself an enormous simplification. The adoption of common rules with regard to the conditions, the methods of assistance, the format of the requisite instruments for recovery or precautionary measures, and the request forms is necessary to facilitate day-to-day administrative practice. The Member States remain entirely responsible for the way they proceed with recovery or precautionary measures under their national legislation.
The proposed action will not mean any additional financial and administrative burdens for the Community, national governments, regional and local authorities, economic operators and citizens, but should on the contrary rationalise the available resources and reduce the costs.
Proposed instruments: directive.
Other means would not be adequate for the following reason(s). A legal act is required to provide a legal basis for mutual recovery assistance between the administrative authorities of different Member States. The proposed Directive is intended to replace the existing Directive 2008/55/EC. New elements, such as the obligation to communicate certain information spontaneously (Art.
5), the possibility for officials of the applicant Member State to be present during administrative enquiries carried out in the territory of the requested Member State and to take an active part in this enquiry, exercising the powers of inspection conferred on officials of the requested Member State (Art.
6), adoption of a uniform standard form for the notification of documents (Art.
8), the adoption of a uniform instrument for enforcement measures (Art. 11) and the uniform instrument for precautionary measures (Art. 15(3)), the minimum amounts for the costs that can be charged (Art. 19), the common standard request forms (Art. 20), the national legislation that will have to be applied when executing a request for assistance with regard to a tax or duty when there is no similar levy in the requested Member State (Art. 22) clearly go beyond what national legislation alone could put in place.
The proposal has no implication for the Community budget.
Simplification
The proposal provides for simplification of legislation, simplification of administrative procedures for public authorities (EU or national).
The legislation is simplified as the proposed act comprises common measures which are easy to interpret and apply. Furthermore, this Directive will have the effect that Member States do no longer need to conclude other bilateral or multilateral agreements to organise recovery assistance.
Administrative authorities will be able to use common tools and instruments in a predefined organisational network (e.g. uniform instrument for enforcement or precautionary measures, without the need to have it recognised or replaced in the requested Member State; standard request forms; standard form for notification of documents; automatic translation of standard forms; electronic communication; general acceptance of digital documents; fixed minimum costs). This will simplify their work. Extending the scope of EU legislation will mean that administrative authorities will not need to have recourse to different sets of legislation, each with their own rules and conditions, depending on the type of claim for which they are requesting recovery assistance.
Repeal of existing legislation The adoption of the proposal will lead to the repeal of existing legislation.
Detailed explanation of the proposal Chapter I contains general provisions, explaining the subject matter (Art.
1), the scope (Art.
2) and provisions with regard to the organisation (Art.
3). As far as the scope is concerned, the Directive applies to all taxes and duties levied by or on behalf of a Member State or on behalf of the EC, and taxes and duties levied by or on behalf of Member States' territorial or administrative subdivisions, as well as compulsory social security contributions. Chapter II deals with the exchange of information. Besides the existing possibility for requesting information (Art.
4), Member States will have to exchange information spontaneously (Art.
5). Further, officials of the applicant Member State will be able to be present in administrative offices in the requested Member State or to participate actively - with the same powers as the officials of the requested Member State - in administrative enquiries on the territory of the requested Member State (Art.
6). Chapter III deals with assistance for the notification of documents (Art. 7 - 8). The procedure for notification will be simplified. The validity of other notification methods is also confirmed. Chapter IV concerns recovery or precautionary measures. Conditions for making a request will become less strict. Experience shows that the older the claim, the slimmer the recovery chances. In certain circumstances, it would be possible to send recovery requests at an early stage (Art. 10). The adoption of a uniform instrument for enforcement in the requested Member State (Art. 11) will obviate the need for having national instruments acknowledged, completed, replaced or translated. With regard to precautionary measures, the Directive would also cover situations where the claim is not yet the subject of an instrument which enables enforcement to go ahead in the applicant Member State (Art. 15). This should help to avoid situations where fraudsters organise insolvencies before an enforcement instrument is established. The adoption of a uniform instrument enabling precautionary measures to be taken in the requested Member State should constitute a basis for such action, again without any need to have national instruments acknowledged, completed, replaced or translated. Furthermore, the Directive contains detailed rules on how to calculate the five-year time period, which is the limit to the obligation to provide recovery assistance (Art. 17). The regime concerning the suspension or interruption of the limitation period is reformed, to make it easier to apply and to guarantee better recovery chances (Art. 18). A guaranteed minimum of the costs that can be charged if the person does not freely pay the requested amount could become an incentive for the requested Member States to devote sufficient resources to recovery assistance (Art. 19). Chapter V contains some general rules governing all types of assistance requests. These relate to the use of standard forms, the communication by electronic means (Art. 20), the use of languages (Art. 21), the legislation applying to the execution of a request (Art. 22) and the disclosure of documents and information (Art. 23). Chapter VI contains final provisions. In cases in which this Directive applies, Member States should not use other mutual assistance arrangements (Art. 24). The provisions of this chapter also deal with the Recovery Committee (Art. 25), the implementing provisions (Art. 26), the evaluation (Art. 27), the transposition (Art. 28), the repeal of the present Directive (Art. 29), and the entry into force of the Directive (Art. 30).
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