"Digital EU tax authority from 2024: new rules for e-commerce, quarterly communications on cross-border payments to combat tax fraud."
The EU tax authority is going digital and is targeting e-commerce starting in 2024. As of January 1, 2024, payment service providers are required to send the tax authorities, on a quarterly basis, details regarding cross-border payments made via credit or debit cards. This new provision is the result of the EU Directive 2020/284, designed to combat tax fraud in the realm of e-commerce.
The instructions on the communication to be transmitted were provided by the Revenue Agency through a measure dated November 20, 2023, thereby aligning with the European regulatory framework.
It is important to note that this flow of information is not limited to Italy; the tax authorities of individual states are required to transmit this data to the central electronic payment information system known as CESOP.
From the measure dated November 20, 2023, a system for cross-tracking online payments emerges.
Instructions for use: How should the communication to the Revenue Agency take place starting in 2024?
Every quarter, payment service providers for whom Italy is the country of origin must transmit the information in their possession through the SID (Data Exchange System). Some of the required data include:
- the BIC or other business identification code that identifies the payment service provider;
- the name or business name of the payment beneficiary as recorded in the documentation of the payment service provider;
- the details of cross-border payments specified in Article 40-ter of the VAT Decree.
These and many other points are specified in the measure. However, the EU’s strategy is not limited to communications from businesses; at the center of attention is CESOP, the central electronic payment information system.
This system, comparable to a large repository of information from the various tax authorities of different EU states, will be tasked with helping to combat fraud by storing, aggregating, and analyzing all VAT-related payment information transmitted by the member states for each individual beneficiary.
