On the eve of a new turning point in the fight against VAT fraud, what can you tell us about the new developments that are about to take hold?
The financial sector will face new challenges in 2024. From January 1, PSPs (Payment Services Providers) will have to report certain cross-border transactions data to their NTAs (National Tax Administrations). They will have to transmit a standardized file message at the end of each quarter. The first report is therefore due in April 2024.
This upcoming European framework is called CESOP standing for Central Electronic System of Payment Information. Its aim is to detect potential VAT fraud in cross-border transactions. In the European Union, VAT fraud accounted for around 5 billion euros in 2015, making it a key topic to tackle for the European Commission.
The information cross-border transaction data collected will be stored in a European database, CESOP, where it will be aggregated and cross-checked with other European Databases. All the information in CESOP will be made available to anti-fraud experts in the Member States via a network called Eurofisc.
What are the main challenges that PSPs will then face?
Here, were talking about all PSPs in scope, namely all Credit institutions, EMIs (E-Money Institutions), Payment Institutions and Post office giro institutions. Several challenges are ahead for PSPs who have already started to investigate how they could efficiently report the transactions in scope.