The Payment Service Providers community in the European Union has come together in a joint initiative to express its serious concerns about the proposal of the European Commission for a Council Directive amending Directive 2006/112/EC. The three European Credit Sector Associations (ECSAs) and the European Payment Institutions Federation agree with the European Commission that fighting VAT fraud is an important objective of general public interest of the Union and of the Member States. However, it is essential that the proposed measures are actually suitable instruments for combatting VAT fraud and are proportionate in terms of the additional burden they place on banks.
The European Association of Co-operative Banks (EACB) considers that the current proposals do not constitute relevant measures to fight VAT fraud. We believe the proposal will not reach its objectives as it is putting forward the wrong means to the right end. EACB therefore opposes to the proposed directive and regulation and urge the Commission to find more effective and proportionate ways to combat VAT fraud in the field of e-commerce.
In particular, the EACB is concerned about the scope of the proposal which covers all PSPs and hence all banks independently of whether they are the PSP of the payee or the PSP of the payer instead. The bank of the payee is the only one to possess the data required by the proposed Council Directive.
From the point of view of cost efficiency, the EACB also believes that the volume of data generated by the requirements in the proposal would be enormous and would require sophisticated software developments at a large cost. The collection of the right data can also be an issue specially in the case of card payments where no IBAN or address of the payee are available.
Furthermore, the proposal only addresses transactions where an IBAN and/or BIC are involved – this can subsequently only refer to bank transfers (direct debits and credit transfers). A card transaction does not involve an IBAN and or a BIC. Accordingly, card transactions seem not be addressed by the proposal, whilst as per available figures cards carry the bulk of e-commerce transactions.
Finally, data is currently stored differently by different PSPs. As a result, the contents of the information given to the register will vary according to the PSP and thus will be very difficult and costly to consolidate for the tax authorities.