The Commission submits every three years a report to the European Parliament and the Council on the procedures applied in the Member States for registering taxable persons and determining and collecting VAT, as well as on the modalities and results of their VAT control systems. The present eighth report covers the developments in the period 2013 to 2016. The numerical data refer to the period between 2013 and 2015. In the period 2013 – 2016, several Member States have reformed or are in the process of reforming (parts of) their tax administration.
Recommendation 1: Tax administration organisation For assessing the impact of changes in managing the VAT system (i.e. reforms in organisation, processes and procedures), Member States should have a monitoring and evaluation system in place to report on the efficiency and effectiveness of the measures taken.
Recommendation 2: Digitalisation and IT
As digitalisation and IT turned into critical elements of tax administration, Member States should carry on digitalizing and automating data and tasks. Subsequently, together with other Member States, they should explore ways how their domestic data could be best used in also helping other Member States. To this end, the ongoing Transaction Network Analysis (TNA) project6 could serve as useful point of reference.
Recommendation 3: VAT Gap calculation and analysis
Member States should invest or continue investing in calculating their own VAT Gap and analysing this gap in more detail.
Recommendation 4: VAT registration for foreign taxpayers
Despite the recommendation in the previous report, some Member States should still invest more in assisting foreign taxpayers in fulfilling their VAT registration obligations.
Recommendation 5: VAT identification numbers
With a view of reducing this administrative burden, Member States and the Commission should reflect on the allocation of VAT identification numbers and VIES registration numbers.
Recommendation 6: Validity of VAT and VIES registration
Member States should check the validity of the VAT and VIES registration data in a more systematic way.
Recommendation 7: Post registration controls
Member States which conduct only preliminary checks before registration, should implement post-registration controls to ensure the reliability of VIES data
Recommendation 8: Post registration controls
As recovery contributes to tax fairness, Member States should enhance the use of all available recovery instruments, including the mutual assistance mechanism.
Recommendation 9: Late VAT refund payments
The Commission launched a study on domestic and cross border VAT refunds. In the context of this study, and together with Member States, it will explore how to improve and speed up this process.
Recommendation 10: Audit and compliance strategy
Member States should ensure that their audit strategy is part of an overall (VAT) compliance strategy and not a stand-alone approach.
Recommendation 11: Customs 42 procedure
Recalling the recommendation in the previous report, Member States should still ensure that the Customs authorities check the VIES number and exchange the information with the tax authorities.