Brussels, 28th January 2002
Taxation and customs: Commission proposes programmes to fight fraud and cut compliance costs
The European Commission has presented proposals for two programmes, "Fiscalis 2007" and "Customs 2007", to help Member States work more closely together against tax and customs fraud, through improved electronic systems for information exchange between national administrations, co-operation in investigations, training seminars for customs and tax officials and experts and the exchanges of officials between national administrations. Customs 2007 also aims to reduce customs compliance costs for economic operators by encouraging the development of a paperless electronic customs system. The two programmes would be open to candidate countries as well as Member States. The programmes would replace and strengthen existing programmes that expire at the end of 2002. The proposed Decisions to establish the programmes will be submitted to the European Parliament and the Council for adoption under the co-decision procedure. The cost of the programmes would be shared between the European Union budget and the participating countries and, for the EU budget, spread over the five years, would be €56 million for Fiscalis 2007 and €133 million for Customs 2007. Both programmes would run from 1 January 2003 to 31 December 2007.
Taxation and Internal Market Commissioner Frits Bolkestein said "Fiscalis 2007 and Customs 2007 will facilitate more intensive co-operation between Member States, as well as candidate countries, to combat large scale customs and tax fraud. Such fraud seriously damages both EU and national financial interests."
The Commission's January 2000 report on VAT fraud underscored the need for Member States to commit themselves to strengthening control and administrative co-operation (see IP/00/115). This need was endorsed by the Council's ad hoc group on tax fraud in their June 2000 report. The existing and new Member States acting alone are not able to assure the proper functioning of the taxation systems of the Internal Market. For example, in the absence of full cooperation between national tax authorities, large scale fraud is possible because goods transported by commercial operators from one Member State to another cross Member States' borders free of VAT or excise duty. The existing Fiscalis programme has proved to be successful in helping Member States to combat fraud. Therefore the Commission proposes that the programme be continued and also extended to direct (income and corporation) tax, whereas the current Fiscalis programme applies only to Value Added Tax (VAT) and excise duties.
Communication and information exchange systems
Electronic communication and information exchange systems have a vital part to play in reinforcing the taxation systems and in particular guaranteeing the effectiveness and efficiency of tax administration. Fiscalis 2007 would provide the necessary legal and budgetary basis for existing electronic information exchange systems in the VAT and excise duties fields to continue and for new data interchange systems between Member States, such as in the direct taxation field to be introduced.
Multilateral controls involve the collaboration of at least three administrations to integrate and co-ordinate their controls of taxable persons having tax obligations in the Member States concerned, within the Community legal framework for co-operation. Such controls have been very successfully used to achieve real financial results in the VAT area. Fiscalis 2007 will extend the possibility of multilateral controls to direct taxation.
Multinational seminars are an effective means of considering issues of common concern and developing best practice. Relevant seminars have already been and will be open to officials from the candidate countries.
Exchanges of officials have practical and work-based objectives, clearly targeted to particular activities and thoroughly prepared. Typically, exchange officials carry out practical tasks on behalf of the administration visited and this has proved to be a useful means of disseminating best administrative practice. Officials from the candidate countries have already participated in exchanges and would do so more intensively under Fiscalis 2007.
Common training programmes
The Fiscalis 2007 programme provides for the development of a common core of training for national officials, including those from candidate countries. Provision is made both for common Community programmes and participation in each other's national training courses. Fiscalis 2007 would also include provision for language training, given that an insufficient level of linguistic competence reduces the chances of successful co-operation between administrations.
The Commission proposal for Customs 2007 is designed to help to facilitate trade and to combat fraud so as to safeguard the financial and security interests of the Community and its citizens. The proposed programme also takes into account the increasingly important role of customs with regard to new policies such as health and environmental protection. A particular focus of Customs 2007 will be helping candidate countries to prepare their systems to respond to open market conditions and to implement customs controls on behalf of the EU at the new external frontier.
Co-operation against fraud
Customs 2007 would continue existing work on risk management to focus controls on high-risk areas. In particular, existing pilot projects would continue on information exchange to facilitate targeting and selection of high-risk traffic. Co-operation between national customs administrations would also be continued and extended. Such cooperation includes the RALFH project, funded by Customs 2002, to improve practical co-operation between Rotterdam, Antwerp, Le Havre, Felixstowe and Hamburg ports, including exchanging risk analysis information, experience in use of container scanners etc.
Reduction in compliance costs
As there are 15 customs administrations in the EU, compliance costs can be significantly higher than in major trading partners of the EU. Customs 2007 would aim to reduce these compliance costs through, for example, standardising data input requirements, particularly for customs declarations. The ultimate goal would be to move to paperless customs procedures ('e-customs') where the maximum amount of data is transferred electronically.
Information technology improvements
Customs 2007 would provide the legal base to allow the development and maintenance of a range of different information technology systems in the customs field. The full implementation of the New Computerised Transit System (NCTS) (see IP/01/153) remains a priority. A new computer platform, the Common Communications Network/Customs System Interface (CCN/CSI), has been established to support the various tax and customs electronic systems and to provide the basis for 'e-customs' in an enlarged Community. The Data Dissemination System (DDS) was established in mid-2001 to allow business on-line access to Community customs tools, such as the Community's integrated tariff (TARIC). Improvements are being made to this TARIC system to enable updated information on customs tariffs to be sent out each day in eleven languages. There is also work underway to link to applicant countries' systems in preparation for their accession.
Customs 2007 would continue existing training activities common training programmes, exchanges of officials, seminars, workshops and project groups, and technical assistance to the applicant countries and to the administrations of non-EU countries.
The full text of the proposed Decisions to establish the Fiscalis 2007 programme and the Customs 2007 programme)" are available on the Europa internet site: