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Administrative cooperation in the field of excise duties

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Close cooperation is required between the administrative authorities of each Member State responsible for implementing the measures adopted in this field in order to combat excise fraud. The European Union (EU) has therefore adopted a Regulation to strengthen cooperation between Member States' tax authorities in order to combat fraud in the field of excise duties on alcohol, tobacco and energy products.

ACT

Council Regulation (EC) No 2073/2004 of 16 November 2004 on administrative cooperation in the field of excise duties.

SUMMARY

The Regulation strengthens cooperation between tax authorities in the matter of excise duties. It will ensure more direct contacts between excise departments in the Member States and so speed up the flow of information. It establishes clearer and more binding rules on cooperation between Member States and entails more automatic and spontaneous information exchange (in addition to information exchange on request).

This Regulation lays down the conditions under which the administrative authorities responsible in the Member States for implementing legislation on excise duties are to cooperate with each other, and with the Commission, in order to ensure compliance with that legislation.

To that end, it lays down rules and procedures enabling the competent authorities of the Member States to cooperate and to exchange with each other, notably by electronic means, any information that may help them to assess excise duties correctly.

The cooperation partners

Each Member State informs the other Member States and the Commission of the "competent authority" it has designated to apply this Regulation. They also designate a "central liaison office" with principal responsibility for contacts with other Member States in the field of administrative cooperation.

The central liaison office has principal responsibility for exchanges of information on movements of excisable products, and in particular:

  • the exchange of data stored in the electronic register of authorised warehousekeepers, registered traders and premises authorised as tax warehouses;
  • the electronic early-warning system; *
  • verification requests to or from other Member States.

The competent authority of each Member State may also designate "liaison departments" (other than the central liaison office) or competent officials to exchange information directly.

Cooperation on request

At the request of the requesting authority *, the requested authority * will communicate any information that may help effect a correct assessment of excise duties. To do so, the requested authority may, if need be, carry out any administrative enquiry necessary to obtain this information. Requests for information and for administrative enquiries are sent using a standard form, of which there is also a simplified version.

The information is to be provided as quickly as possible, and no later than three months following the date of receipt of the request. Different time limits may be agreed by common consent between the requesting and requested authorities. Where the requested authority is unable to respond to the request by the time limit, it must immediately inform the requesting authority of the reasons for its failure to do so and indicate when it will be able to respond.

By agreement between the requesting authority and the requested authority, officials authorised by the requesting authority may be present at the offices where the administrative authorities perform duties relating to the exchange of information. They may also be present during administrative enquiries.

With a view to exchanging information, two or more Member States may agree to conduct simultaneous controls, in their own territory, of one or more persons. Such controls are often more effective.

Exchange of information without prior request

The competent authority of each Member State must, by occasional automatic or regular automatic exchange, forward information that may help correctly assess excise duties to the competent authority of any other Member State concerned, in three cases:

  • where an irregularity or an infringement of excise duty legislation has occurred, or is suspected to have occurred, in the other Member State;
  • where an irregularity or an infringement of excise duty legislation which has occurred, or is suspected to have occurred, in the territory of one Member State may have repercussions in another Member State;
  • where there is a risk of fraud or a loss of excise duty in the other Member State.

Outside these three situations, the competent authorities of the Member States may in any case exchange the requisite information spontaneously.

The Regulation does not oblige the Member States to impose new obligations on persons for the purposes of collecting the information they are requested to provide.

Storage and exchange of information specific to intra-Community transactions

The Regulation requires each Member State's competent authorities to maintain an electronic database containing:

  • a register of persons who are authorised warehousekeepers or traders registered for excise purposes;
  • a register of premises authorised as tax warehouses.

These registers include the identification number issued by the competent authority in respect of the person or premises, the name and address of the person or premises, the category and nomenclature relating to excise products of the products which may be held or received by the person or which may be held or received at these premises, identification of the central liaison office or the excise office from which further information may be obtained, the date of issue, amendment and where applicable, the date of cessation of validity of the authorisation as an authorised warehousekeeper or as a registered trader and the information required to identify persons who have assumed obligations or who are involved on an occasional basis in the movement of excisable products.

Each national register is available, for excise duty purposes only, to the competent authorities of the other Member States. The information is kept for at least three years from the end of the calendar year in which the movement was initiated.

Evaluating the effectiveness of this cooperation system in combating tax evasion and tax fraud

The Member States and the Commission are to examine and evaluate the working of the arrangements for administrative cooperation provided for in the Regulation. The Commission pools the Member States' experience with the aim of improving the system's operation. The Commission is assisted in this task by the Excise Committee set up by Directive 92/12/EEC.

To that end, Member States are to communicate to the Commission any available information relevant to their application of this Regulation, including any statistical data available, methods or practices used or suspected of having been used to contravene excise duty legislation and any shortcomings or lacunae they have revealed in the operation of the system, where it is deemed that such information is of particular interest to other Member States. Such information contain no individual or personal data.

Every five years from the date of entry into force of the Regulation and based in particular on the information provided by the Member States, the Commission reports to the European Parliament and to the Council on this Regulation's application.

Relations with third countries

When the competent authority of a Member State receives information from a third country, that authority may pass the information on to the competent authorities of any Member States which might be interested, in so far as permitted by assistance arrangements with that particular third country. Such information may also be passed on to the Commission whenever it is of Community interest.

In exchange, provided a third country has given a legal undertaking to provide the assistance required to gather evidence of the irregular nature of transactions which appear to contravene excise duty legislation, information obtained under the Regulation may be communicated to it.

Conditions governing the exchange of information

The requested authority in one Member State must provide the requesting authority in another Member State with the information referred to in the Regulation provided that:

  • the number and the nature of the requests for information made by the requesting authority within a specific period do not impose a disproportionate administrative burden on the requested authority;
  • the requesting authority has exhausted the usual sources of information which it could have used in the circumstances to obtain the information requested, without running the risk of jeopardising the achievement of the desired end.

The competent authority of a Member State may refuse to forward information if the requesting Member State cannot, for legal reasons, provide similar information. The provision of information may be refused where it would lead to the disclosure of a commercial, industrial or professional secret or of a commercial process, or where its disclosure would be contrary to public policy.

Information communicated pursuant to the Regulation should, as far as possible, be provided by electronic means.

Background

Close cooperation is required between the administrative authorities of each Member State responsible for implementing the measures adopted in this field in order to combat excise fraud.

It is therefore essential to define the rules under which the administrative authorities of the Member States must afford each other mutual assistance and cooperate with the Commission to ensure that the rules relating to the movement of excisable products and the collection of excise duties are correctly applied.

As the EU lacked an act specifically concerning administrative cooperation in the field of excise duties, the Council has adopted this Regulation in order to strengthen, simplify and replace the provisions of Directives 77/799/EEC and 92/12/EEC concerning administrative cooperation in that field. The Regulation also complements the scheme to computerise the movement of excisable products (Decision 2003/1152/EC).

Key terms used in the act
  • Electronic early warning system: a system under which the central liaison office or a liaison department in the Member State of departure of the excisable products can send an information or warning message to the liaison office in the Member State of destination as soon as that liaison office or liaison department is in possession of the accompanying administrative document information, and at the latest when the products are dispatched.
  • Requesting authority: the central liaison office of a Member State or any liaison department or competent official of that Member State requesting assistance on behalf of the competent authority.
  • Requested authority: the central liaison office of a Member State or any liaison department or competent official of that Member State requesting assistance on behalf of the competent authority.

REFERENCES

ActEntry into forceDeadline for transposition in the Member StatesOfficial Journal
Regulation (EC) No 2073/2004 [adoption: codecision COD/2003/0309]01.07.2005-OJ L 359, 4.12.2004
Last updated: 02.03.2005
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