EU budget: Boosting cooperation between tax and customs authorities for a safer and more prosperous EU

For the next long-term EU budget 2021-2027, the Commission is proposing measures to make tax and customs cooperation between Member States better and more efficient.

Continued funding of these programmes will help the EU to progress in offering businesses unfettered and easy access to the EU’s Single Market so that trade can flourish, protect citizens from dangerous goods entering the Union at our external borders and ensure that Member States are equipped to fight tax avoidance and tax evasion.

Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: “Protecting the European Union’s customs territory and implementing our common rules on taxation require strong cooperation between the relevant national authorities. Our new Customs and Fiscalis programmes will help to make that happen. At minimal cost, they provide a true European added value, offering unprecedented advantages to Member States’ tax and customs authorities as they work together in the interests of our citizens and businesses.”

The Commission is proposing a continued financial commitment of €950 million for the EU’s customs programme and €270 million for the EU’s Fiscalis programme, representing just 0.07% and 0.02% of the next EU budget respectively.

The new Customs Programme will help put in place a modern Customs Union which puts the interests of EU business and citizens at its heart, by:

• Increasing information and data exchange between national customs administrations to better detect the flow of dangerous and counterfeit goods: a total of 2.7 million pieces of ammunition and 188,000 pieces of explosives were seized at EU borders in 2017;
• Supporting customs authorities in protecting the financial and economic interests of the Union, as well as in the correct collection of customs duties, import VAT and excise duties: The new programme will improve the capacity of customs administrations to deal with growing trade and changing economic and working models such as e-commerce and blockchain and will enhance cooperation and training across sectors;
• Devising better risk management strategies to protect the EU’s financial interests; and help the EU better respond to security threats and transnational crime;
• Continuing to facilitate growing levels of trade: EU customs authorities handled 331 million declarations last year.

The new Fiscalis Programme will support cooperation between Member States’ tax administrations and better contribute to the fight against tax fraud, tax evasion and tax avoidance, by:

• Putting in place better and more connected IT systems, which each Member State would otherwise have to develop individually. This includes developing and maintaining interoperable and cost-effective IT solutions to support tax authorities in implementing EU legislation;
• Sharing good practices and training to boost efficiency: this includes helping prevent unnecessary administrative burdens for citizens and businesses (including SMEs) in cross-border transactions and significantly adding to the 423,000 tax professionals trained since 2014;
• Putting in place joint actions in risk management and audits – 1,000 of which have been organised between Member States since 2014;
• Fostering Union competitiveness, boosting innovation and facilitating the implementation of new economic models.

Next steps

A swift agreement on the overall long-term EU budget and its sectoral proposals is essential to ensure that EU funds for ongoing programmes, including those dedicated to strengthening the Customs Union and the fight against tax avoidance and tax evasion can continue to deliver results on the ground.

Delays similar to the ones experienced at the beginning of the current 2014-2020 budgetary period would mean that the EU loses out on revenues to the EU budget from an efficient collection of EU customs duties, that customs authorities are less able to keep our borders safe, and that citizens are less protected from dangerous and counterfeit goods.

An agreement on the next long-term budget in 2019 would provide for a seamless transition between the current long-term budget (2014-2020) and the new one and would ensure predictability of funding to the benefit of all.

Background

The EU’s Customs Programme has already boosted the ability of customs authorities to keep our borders safe, while facilitating trade and protecting EU citizens from dangerous and counterfeit goods. It has also enabled better and more efficient collection of EU customs duties, which in 2017 made up almost 16% of the EU’s overall budget. As the EU Customs Union prepares to celebrate its 50th anniversary in 2018, today’s proposal would ensure continued improvements to the backbone of the EU’s Single Market.

In parallel, the EU’s Fiscalis Programme has also proven itself indispensable in helping tax administrations to cooperate better across the EU to improve tax collection and fight tax fraud. First designed in 1993 purely as a training and exchange programme for tax officials, Fiscalis has become a game-changer for the EU’s taxation landscape over the last 20 years. It offers a flexible and simple environment for tax cooperation, with a substantial EU added value and impact despite its relatively limited size. In one year alone (2015), it helped Member States to assess over €590 million in taxes for possible recovery through joint EU controls. Today’s proposal for a new ‘Fiscalis’ programme comes at a time where public sentiment against tax avoidance runs high, with EU governments needing to recoup more than €50 billion a year lost to Value Added Tax (VAT) fraud. A strengthened programme will help address this issue.