Brussels, 8 November 2019
Joint Industry Statement: Council adoption of VAT reporting measures – payments industry remains concerned
The European Payment Institutions Federation, the European Banking Federation, the European Savings and Retail Banking Group and the European Association of Co-operative Banks note the adoption today by the ECOFIN Council of the proposal on VAT-related information reporting requirements imposed on Banks and Payment Service Providers.
Throughout the legislative procedure we have consistently raised concerns about the feasibility and effectiveness of the proposal as drafted. As outlined in our recent Joint Statement, these concerns have not been taken into account to a degree that would give comfort to the industry that the reporting requirements can be implemented with reasonable efforts and can result in meaningful information to the tax authorities. We would like to again reiterate that as an industry we are very supportive of the objectives of the proposal to fight VAT fraud but that we are simply highlighting that the adopted proposal is not in our view a proportionate and most effective way to collect this information.
Therefore, we are disappointed to see that the ECOFIN has adopted the proposal without the modifications needed by the industry. We now call upon the Member States and the Commission to closely involve the payments industry in the design of the details of the reporting framework. A constructive dialogue going forward is crucial to make sure that we build a reporting system that delivers the needed information to authorities but at the same time preserves the established way of functioning of the payments industry and does not create undue burden. We request that a joint group composed of Commission, Member State and industry expert is established with a view to achieve this.
Contact:
Anni Mykkanen, a.mykkanen@ebf.eu
Nahuel Mercedes, +32 (0)2 508 3748, n.mercedes@ebf.eu
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Brussels, 30 October 2019
Financial industry against VAT fraud: joint position paper
The European Banking Federation, European Savings and Retail Banking Group, European Association of Co-operative Banks, European Payment Institutions Federation (and their respective members) strongly support the fight against VAT and other tax fraud but are deeply concerned that in current form the proposals:
- Are disproportionate in terms of scope, volume of data required and cost
- Create significant risk
- Produce uncertainty in terms of reporting obligations
- Will not practically achieve stated objectives
With the current proposal seeking to be approved at November’s ECOFIN, we would welcome your support in terms of prompting a full review of the proposals with the active involvement of the Payments Industry. The objective would be to ensure that the proposal is not approved until it has been amended into a form that
1) Is practical and workable for the industry to deliver and
2) Meets the needs of Member States in terms of effectively combatting VAT fraud.
In current form, our firm view is that the proposal achieves neither.
It is absolutely clear that Member States must have effective and efficient tools to combat VAT and tax fraud and the Payments Industry is fully prepared to work closely to ensure that this can be delivered.
We are however troubled that whilst concerns have been raised with the Commission, including recommendations on how to improve the proposals to achieve its stated objectives and to align it with the highly complex, multi-party and rapidly evolving nature of the payments industry, we believe these have been misunderstood and in some areas simply ignored.
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]]>EBF advisor: Roger Kaiser
Publication date: 18 April 2018
The scope of application of the VAT exemption related to the services supplied to their members by independent groups of persons (“IGPs”) has been strictly limited by recent decisions of the Court of Justice of the European Union, seriously affecting European banks.
This case law will lead to a significant increase of the cost of supplies of services between companies active in the financial and insurance sector, since VAT will be applicable on such services and the above mentioned taxable persons usually only benefit from limited input VAT deduction rights. It is essential to secure the continued applicability of the IGP regime on the financial and insurance sectors. Therefore the EBF has sent a letter to the Commission to urge them to submit draft legislation to amend the VAT Directive to that effect.
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]]>EBF advisor: Roger Kaiser
Publication date: 15 February 2017
The European Banking Federation (EBF), which is the voice of the European banks, thanks the Commission for the opportunity offered to express views on whether there is a need for EU action aimed at introducing more effective disincentives for intermediaries engaged in operations that facilitate tax evasion and tax avoidance.
As an umbrella organisation representing the whole European banking sector, we have difficulties to answer the questionnaire of the consultation which seems to be directed to individual companies and legal firms.
In this context, we thought it appropriate to remind the Commission of the role of banks as obliged entities for AML purposes as well as their involvement in tax processes, the latter element having increased dramatically over the past years.
The EBF fully supports the objectives of AML and the fight against tax evasion.
We are in favour of the protection of the integrity and stability of the international financial system. Money laundering and terrorist financing are serious threats to global security and to the integrity of the financial system. Resources available to terrorists and those engaged in crime should be cut off. Banks can only live in an environment where the rule of law is fully applied.
The EBF strongly condemns tax evasion and tax fraud. They create distortions in the single market for financial services and pose a great danger to the rule of law.
The EBF experts are actively involved in international expert groups on anti-money laundering and tax transparency, both at the level of the OECD and of the EU. In these fora, we assist governments and institutions by providing expertise and workable solutions, seeking clarity on the legal and compliance requirements imposed on banks, while taking into account operational constraints, the competitive dimension, potential de-risking and the need to ensure an appropriate level of data protection and data security.
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