On Tuesday 16 July 2019, the European Court of Auditors (ECA) will publish a special report on the EU action to tackle VAT fraud and collect customs duties on e-commerce.
ABOUT THE AUDIT
The ECA carried out this audit because of the risk of irregularities occurring in the collection of VAT and customs duties in cross-border e-commerce. EU auditors assessed whether the European Commission and the Member States are addressing effectively the challenges faced in collecting the correct amounts of VAT and customs duties due on goods and services traded over the internet. They also examined the new provisions of the “e-commerce package”.
The report is expected to conclude that, despite some recent developments, the EU is currently not dealing adequately with these issues. Auditors are expected to point out the many challenges that remain to be resolved in the collection of VAT and customs duties on cross-border e-commerce. They will make a number of recommendations to better address the weaknesses identified.
ABOUT THE TOPIC
Member States collect VAT and customs duties on goods and services traded, while the European Commission carries out inspections of amounts collected. It is also responsible for setting customs and taxation policies and for strategies and legislation in these areas.
E-commerce has been prone to irregularities as regards VAT and customs duties. There are no estimates available for cross-border supplies of services, but the European Commission estimates losses on supplies of low value goods from non-EU countries to be as high as €5 billion per year.
The ECA’s special reports set out the results of its audits of EU policies and programmes or management topics related to specific budgetary areas. The ECA selects and designs these audit tasks to be of maximum impact by considering the risks to performance or compliance, the level of income or spending involved, forthcoming developments and political and public interest.