Parliament backs measures to cut e-commerce VAT fraud

18 Dec 2019 12:29 PM

MEPs supported measures on Tuesday designed to fight e-commerce VAT evasion that would help cut some of the €137 billion lost each year across the EU to VAT fraud.

The measures, contained in two pieces of legislation spearheaded through the Parliament by Lídia Perreira (EPP, PT) and debated on Monday, require payment service providers to collect cross-border e-commerce payment records. A new central electronic storage system would be created so that anti-fraud authorities in member states can process payment information better.

Administrative cooperation among the member states’ tax authorities and payment service providers will also be strengthened.

More effective information-sharing and prosecution

MEPs proposed various improvements to the texts, in a bid to make information-sharing and prosecution more effective. More specifically, some of these improvements include:

The regulation on measures to strengthen administrative cooperation in order to combat VAT fraud was adopted with 590 votes to 19 and 81 abstentions.

The directive on certain requirements for payment service providers was adopted with 591 votes to 18 and 86 abstentions.

Next steps

EU member state ministers must now adopt the two pieces of legislation.

Background

According to Commission estimates, online sales in the EU are worth €550 billion a year – €96 billion of which is cross-border. The new rules should raise €7 billion in VAT revenues for member states.

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