CESOP: Compulsory transmission and exchange of cross-border payment data to effectively detect and eliminate VAT fraud
On 13 January 2023, the EU Commission issued a user guide for implementation of CESOP reporting requirements. As per relevant announcement on the website of the Independent Authority for Public Revenues (AADE), the European Council has adopted a new legislative package to request payment service providers to transmit information on cross-border payments originating from Member States as well as the beneficiary (“the payee”) of these cross-border payments. Within this context, payment service providers (namely credit institutions, electronic money institutions, post-office giro institutions and payment institutions) offering payment services in the EU will have to monitor the payees of cross-border payments and transmit to the tax administrations of member states information on those payees who receive more than twenty-five (25) cross-border payments per quarter.
Such information will be centralized in a European database, the Central Electronic System of Payment information (CESOP), where it will be stored and cross-checked with other European databases. All information in CESOP will be available to VAT anti-fraud experts officials of tax administrations of member states, in order to assist them for the detection of possible e-commerce VAT fraud conducted by sellers/providers who are established in another member state or in a non-EU country.
These new rules will apply as of 1st January 2024, while the first transmission of respective cross-border payment data by payment service providers to the Independent Authority for Public Revenues (AADE) is expected to be completed by 30 April 2024, covering the first quarter of 2024.
