Download exchange of information on request

UNITED AGAINST VAT FRAUD?
PRACTICAL ASPECTS OF COOPERATION
BETWEEN MEMBER STATES AND EU
INSTITUTIONS
SLOVENIAN PRESPECTIVE
Marjetka Štemberger, M.Sc.
THE MISSION
Other taxes
The Tax Administration provides taxpayers with services of the highest
quality and in this way it assists them at tax compliance with fair and
unbiased use of tax regulations.
3
ORGANISATION OF THE TAX ADMINISTRATION
 The Tax Administration of the Republic of Slovenia is a
constituent part of the Ministry of Finance.
 It consists of:
•
General Tax Office,
•
15 tax offices with branches,
•
Special Tax Office (Large Business Office).
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REGIONAL TAX OFFICES WITH BRANCHES
5
6
FIELDS OF INTERNATIONAL INFORMATION EXCHANGE
INTERNATIONAL INFORMATION
EXCHANGE UNIT
Mutual assistance in the field of direct
taxation and taxation of insurance
premiums (Council Directive 77/799/
EC)
Mutual assistance between MS of
the EU in recovery of taxes (Council
Directive 76/308/EGS)
International Information Exchange
based on Double Taxation
Convention
Administrative co-operation in the
field of VAT (Council Regulation
1798/03/EC)
Automatic exchange of information on
savings income in the form of interest
payment (Council Directive 2003/48/
EC)
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NEED FOR EXCHANGE OF INFORMATION
 Globalisation of economies and removal of exchange controls and other
barriers to the free movement of capital promote economic development
and world trade.
BUT
 increase possibilities of tax avoidance and evasion, which have effects on
fiscal equity and on budgets, as well as they distort international
competition.
 European Union: free movement of goods and services; removal of tax
borders between MS.
THUS
 Need to control the correct application of the VAT rules = an
international problem.
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ADMINISTRATIVE COOPERATION (1)
 COUNCIL REGULATION (EC) NO 1798/2003 of 7 October 2003 on
administrative cooperation in the field of value added tax and repealing
Regulation (EEC) No 218/92.
 COMMISSION REGULATION (EC) No 1925/2004 of 29 October 2004
laying down detailed rules for implementing certain provisions of Council
Regulation (EC) concerning administrative cooperation in the field of
value-added tax.
 Exchange of information on request:
o
Request for information and for administrative enquires,
o
Presence in administrative offices and participation in administrative enquires,
Simultaneous controls.
 Request for administrative notification
o
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ADMINISTRATIVE COOPERATION (2)
 Exchange of information without prior request:
o
o
automatic exchange,
structured automatic exchange.
 Categories of information to be exchanged without prior request
regarding:
o
o
o
o
o
Sales of new transport vehicles,
Long-distance sale which is not VAT applicable,
Information about possible deviations and misconducts in
transactions of goods in EU – VIES,
Information on (potential) "missing traders" but VAT identification
number has not been cancelled,
Information on (potential) "missing traders" taxpayer and ID number
cessation.
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CLO (Central liaison office)
The main tasks of CLO are as follows:
•Transfer of VIES data
•VAT number validation service
•VAT control:
•Regular checking,
•Support to auditors (controllers and auditors),
•Mutual assistance.
•Coordination and distribution of information
•Administrative cooperation (translations, requests and answers must be completed
and understandable, taking care of deadlines, etc.)
•CLO located at General Tax Office
• 3 employees
• contact person at each local office
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HOW CLO FUNCTIONS AT LOCAL LEVELS?
Director of the
General Tax
Office
CLO
official
General Office
Local Office
LO 1
Director
LO16
Director
LO 2
Director
CLO
official
Auditor 1
Controller
organisation
1
function
12
EXCHANGE OF INFORMATION ON REQUEST (1)
CLO receives the SCAC 2004 form or SCAC 383 form via CCN/CSI
Work procedure:
- Inspection of the form (as well as checking of the eligibility),
- Data verification of the taxable person established in Slovenia and the taxable
person established abroad,
- Verification of turnover data in the VIES system,
- Translation of the form,
- Deposition of the original form, of the translation and of any eventual
documentation on the authorised tax office (on the directory),
- Notification of the tax office employee, who is responsible for CLO, about the
reception of the form and establishing a 1-month deadline for finding a solution
(defining a date),
- In case that the tax office was not able to acquire information by the imposed
deadline, it has to report it to CLO; nevertheless we follow the principle that the
applicant state is notified about each discovered case in a required 3-month
period,
- Reception of the answer from the tax office,
- CLO verifies the answers, checks the VIES system data, translates answers and
together with any eventual documentation sends them to the applicant state via
CCN/CSI e-mail.
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EXCHANGE OF INFORMATION ON REQUEST (2)
CLO receives the SCAC 2004 form or SCAC 383 form from the tax office via the directory
Work procedure:
- Inspection of the form (as well as checking of the eligibility),
- Data verification of the taxable person established in Slovenia and the taxable person
established abroad,
- Verification of turnover data in the VIES system,
- Translation of the form,
- Sending the form and the eventual documentation to the requested state via CCN/CSI e-mail,
- Reception of the answer from the requested state,
- Verification of the answers and of the documentation,
- Translation of the answers,
- Deposition of the original form, of the translation and of any eventual documentation to the
directory,
- Notification of the tax office employee, who is responsible for CLO, about the reception of the
answer.
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PROCEDURES IN DEVIATION ANALISYS OF DATA OF THE LIABLE PERSON AND VIES
VIES <> ACQUISITON
(unaccounted differences in the
documentation of
the liable person)
INFORMATION IS
NOT SENT
NO
MAKING
REQUEST IN
THE EU
YES
INFLUENCE ON
VAT RETURNS IN THE
REP. OF SLOVENIA
N0
DIFFERENCE > +- 5%
YES
TRANSFER OF
INFORMATION
WITHOUT PRIOR
REQUEST
ANSWER OF
THE EU
(STRUCTURED
AUTOMATIC)
YES
IRREGULARITIES
NO
VAT
ASSESSMENT
FOR THE
DIFFERENCE
PROCEDURE
STOPPED
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STATISTICS -REQUEST FOR INFORMATION (Article 5)
Num ber received
Num ber sent
2005
2006
2007
2005
2006
2007
Austria (AT)
1
3
6
11
28
20
Belgium (BE)
3
3
7
4
29
10
Bulgaria (BG)
2
Cyprus (CY)
0
0
0
Czech Republic (CZ)
3
10
6
Germ any (DE)
27
42
91
Denm ark (DK)
0
Estonia (EE)
0
2
0
2
1
193
126
0
2
0
1
0
0
0
1
0
0
Spain (ES)
1
0
2
6
0
Finland (FI)
0
0
1
0
0
Greece (EL)
1
France (FR)
148
0
1
2
5
1
United Kingdom (GB)
1
0
3
1
4
8
Hungary (HU)
41
35
97
2
7
13
Ireland (IE)
2
0
0
1
1
Italy (IT)
3
12
33
65
48
0
1
0
0
5
2
1
0
Lithuania (LT)
Luxem bourg (LU)
0
0
Latvia (LV)
2
1
Malta (MT)
0
0
0
0
The Netherlands (NL)
4
0
11
11
5
1
0
1
0
0
0
0
0
0
Poland (PL)
2
17
1
Portugal (PT)
Rom ania (RO)
2
1
Sw eden (SE)
2
0
2
Slovak Republic (SK)
2
2
7
TOTAL
89
115
260
0
1
203
1
0
0
11
362
246
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SPONTANEOUS EXCHANGE OF INFORMATION (1)
CLO receives spontaneous information in the SCAC 2004 form or SCAC 383 form via
CCN/CSI e-mail
Work procedure:
- Inspection of the information,
- Data verification of the taxable person established in Slovenia and the taxable person
established abroad,
- Verification of turnover data in the VIES system,
- Translation of the spontaneous information,
- Deposition of the original form, of the translation and of any eventual documentation on the
authorised tax office (to the directory),
- Notification of the tax office employee, who is responsible for CLO, about the reception of the
spontaneous information and establishing a 1-month deadline for a feedback information
(defining a date),
- Reception of the answer to the spontaneous information from the tax office,
- CLO verifies the answers, checks the VIES system data, translates findings and together with
any possible documentation sends them to the applicant state via CCN/CSI e-mail.
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SPONTANEOUS EXCHANGE OF INFORMATION (2)
CLO receives spontaneous information in the SCAC 2004 form or SCAC 383 form from
the tax office via the directory
Work procedure:
- Inspection of the spontaneous information,
- Data verification of the taxable person established in Slovenia and the taxable
person established abroad,
- Verification of turnover data in the VIES system,
- Translation of the spontaneous information,
- Sending the spontaneous information and the eventual documentation to the
relevant Member State via CCN/CSI e-mail,
- Reception of the eventual answer from the Member State,
- Verification of the answer,
- Translation of the answers,
- Deposition of the original answer, of the translation and of the eventual
documentation to the directory,
- Notification of the tax office employee, who is responsible for CLO, about the
reception of the answer.
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Information sent:
AUTOMATIC AND STRUCTURED AUTOMATIC EXCHANGE OF INFORMATION
Information sent:
Calendar
year
New
means of
transport
VAT
Refund
Allocation
of VAT ID
number
Information
of missing
traders
Information
about potencial
missing traders
2005
337
691
145
-
-
2006
61
2,854
55
16
22
2007
357
3,672
97
182
72
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Information sent:
AUTOMATIC AND STRUCTURED AUTOMATIC EXCHANGE OF INFORMATION
Information received:
Calendar
year
New
means of
transport
VAT
Refund
Allocation
of VAT ID
number
Information
about
potencial
missing
traders
Information of
missing
traders
2005
-
1,658
-
-
-
2006
27
2,138
55
-
276
2007
9
5,361
63
-
5,702
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SUPERVISION PROCEDURES
 Introduction of system supervision over newly registered companies for VAT,
 Introduction of computer-supported auditing with ACL programme,
 Introduction of procedure of pre-registration supervision at allocation of




identification number for VAT purposes,
Introduction of procedure for cancellation of identification number for VAT
purposes out of official duty,
Introduction of rotation audits,
Introduction of special audit supervision methodology in cases of carousel evasion
or missing trader frauds,
Preparation of a special programme of annual tax audit supervision for VAT and
definition of risk areas in connection with VAT.
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ORGANISATIONAL MEASURES
 Establishing of an investigative and analytical service which deals with
prevention and discovering of tax evasion (mainly in the field of VAT).
 VAT group which provides uniformity and legality of decision-making in tax audit
supervision on the central level with the assistance of preventive methods support to the inspector at decision-making in more difficult cases.
 Introduction of specialists for individual fields - construction, services for
guests (hotels, restaurants, etc.), transfer pricing, sale of cars, computersupported auditing.
 Starting with supervised projects – on the field of construction and motor
vehicle.
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PROJECT MANAGAMENT OF TAX AUDIT
 Starting February 2008 (2 projects: Construction and Motor Vehicle)
 Involved 70 % of the resources (tax auditors)
ADVANTAGES:
 Monthly meetings – spread a good and equal practice on the whole area of Tax
Administration, frequent communication between auditors,
 Specialization of auditors,
 Audits are quick and effective,
 Public announcement – increase of voluntary compliance of tax liabilities,
 Cooperation between departments in Tax Administration.
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CHANGES OF THE VAT ACT
 Newly registered persons liable for VAT shall submit monthly settlements
during the period of one year - quicker reaction time for discovering
missing trader companies.
 Shortening of the time limit for withdrawal of VAT identification number
if the taxable person fails to submit VAT settlements from 12 to 6
months (for foreign persons from 6 to 3 months) - possibility of
withdrawal of VAT identification number without a special declaratory
procedure.
 Possibility of withdrawal (cancellation) of VAT identification number
according to the official procedure in cases where the taxable person
fails to meet requirements for registration - missing trader companies.
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CHANGES OF THE VAT ACT – FIGHT AGAINST VAT EVASION
 Possibility of temporary insurance between audit procedure in
cases of doubtful higher claims for VAT refund.
 Possibility of requesting insurance or requesting warranty in cases
of suspicious large VAT refund requests - before VAT refund, the
taxable person shall submit appropriate insurance or warranty,
from which possible obligations in cases of illegal claim may be
paid.
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OBJECTIVES
 Achieving higher level of quality and not quantity of
work, and with this improvement of voluntary tax
compliance and provision of uniformity of tax
administration's operations.
 Provision of uniqueness of taxation in cases of
international transactions and tax frauds with the
system of taxation of transactions according to their
economic contents.
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COOPERATION WITH STATE INSTUTIONS
 The quality of supervision division performance depends also on
effective cooperation with the following state institutions:
o
Customs Administration,
o
Office for Money Laundering Prevention,
o
General police Office,
o
State prosecution,
o
Court of Auditors of the Republic of Slovenia,
o
Budget Supervision Office.
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ESTIMATED ADDITIONAL LIABILITIES
IN THE PERIOD BETWEEN 2006 AND 31 MARCH, 2008
Estimated
Additional
Liabilities in €
Number of
persons
liable to VAT
Number of all
inspectors
(average)
31,045,447.34
89,085
358
87,067,610.00
38,367,988.80
87,163
362
23,043,444.60
11,479,996.62
88,381
Calendar
Year
Number
of audits
2006
5,069
69,058,738.11
2007
6,278
2008
1,667
(1st quarter)
Out of which
VAT in €
335
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CONCLUSION
• Adoption of all necessary measures against tax frauds to prevent
distortion of competition on the common market.
• Operation of infrastructure for communication and information
exchange and provision of uniform application of the Community
law.
•
It requires a high common standard of understanding of the
Community law and its application in all Member States.
• We achieve this only with effective training and national legal and
transparent control procedures with more intensive and effective
information exchange in the field of prevention of tax frauds.
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THANK YOU FOR YOUR
ATTENTION!
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