On 23 May 2012, European Commission publishes study on issues arising from a reduced time frame and the options allowed for submitting VAT recapitulative statements – Application of Article 263(1) of Directive 2006/112/EC (amended by Directive 2008/117/EC).

Article 263(1) aims at ensuring that information on intra-Community supplies of goods, including deemed supplies, and services is collected and exchanged between Member States more quickly, so as to enable quicker detection of fraud, in particular VAT carousel (missing trader) fraud.

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The report was drawn up for the European Commission by PWC in 2011 and focuses on the consequences for business arising from a reduced time frame for submitting recapitulative statements and the possibilities offered to Member States to derogate from the normal rule.

Recommendations and next steps mentioned in the Final Report are:

236 The Study performed by PwC, according to the agreed scope, aimed at analysing the impact of the implementation of article 263(1) for businesses. Based on the results of the Study, it is clear that there is an increase in the on-time cost and the recurring cost for businesses due to the new VAT legislation.
237 Further analysis is required to weigh these additional costs against the aim and benefits of the new VAT legislation, namely the reduction of the VAT gap through the quicker detection of fraud and decreasing the risk on VAT carrousels.
238 Those benefits, if identified, which we have not analysed in the Study because it was not in scope, will mainly be for the tax authorities (in terms of a reduction of the VAT gap), but also for the businesses due to a reduced risk to be unwillingly involved in and to be held liable for VAT fraud. As such it may also help to reduce VAT fraud and unfair competition by fraudulent companies.
239 As the reduction in the time frame of the recapitulative statement is one element from a total to combat fraud, also the other measures to reduce the VAT gap need to be taken up in the analysis to see the aggregated effect on the costs for businesses and to verify whether the measures have an impact on the VAT gap.
240 Calculating the costs and benefits related to all the measures gives a relevant insight whether the measures are, from a macro-economic point of view, justified.
241 Further analysis can be done on how the recurring cost can be decreased by e.g. harmonising the filing procedure through a single, user friendly interface for all Member States and/or through accepting XML files to be uploaded in the same format across all Member States.


For more information:

VAT – Expert study on the issues arising from a reduced time frame and the options allowed for submitting recapitulative statements (1.48 Mb)

Appendix 1 (786 Kb)

Appendix 2 (891 Kb)

Appendix 3 (101 Kb)

Appendix 4 (83 Kb)


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