Stichting Europese Fiscale Studies wenst u van harte welkom

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Stichting Europese Fiscale Studieswenst u van
harte welkom
Uw dagvoorzitter Prof. dr. H.A. Kogels Erasmus
Universiteit Rotterdam

• Deze presentatie is na afloop van het seminar te
  downloaden op onze website

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• Alexander Wiedow
• European Commission, Director for indirect
  taxation and tax administration
• Customs fraud and VAT fraud
• Similar or different?
• Or both?

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• Customs fraud
• financial aspect (pay less)
• (classification, preferential origin certificates
  etc)
• gain market access
• (specific authorisations, quota etc)
• avoid standards, health- or security
  legislation
• (counterfeit, dangerous goods etc)

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• Crucial concepts
• Security related issues (incl. counterfeit)
  either detected on importation or damage is done
• Financial aspects similar to fiscal aspects as
  ex post control (audits) possible but competitive
  disadvantage for others difficult to repair

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• Continuously growing figures of importation (80M
  declaration in 2006)? no perfect control at entry
  possible.
• Possible long term solutions
• risk management with priority given to security
• single window to bundle information and various
  controls
• fiscal issues in addition audits and elimination
  of incoherent tariffs

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• VAT shortfalls
• missing trader fraud
• cheating on deductions
• disappearing without handing over VAT
  collected to Fisc
• insolvencies?
• fake exports
• black economy

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• Make system more robust but how?
• more obligations on business to allow better
  check of more complete info?
• link payments and deduction?
• forget invoices as basis for deduction?
• tax intra EC-supplies (at departure or
  arrival)?
• general reverse charge?
• reinforce customs procedure (export)
• reinforce after import the follow up of
  the circulation of the goods ?

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• Just improve working of current system?
• by increasing administrative cooperation (EU
  agency)?
• better administrations (better risk
  management, better/quicker control)?
• partnerships with legitimate business (label
  of trust for active co-operation)?
• more harmonisation also of operational issues
  (VAT identification, control rhythm etc)?

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• Ferdinand Raud
• Personal Mission MMWOPS

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• Make Money
• While Other People Sleep

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• Henk Wildeboer
• Corporate Fiscal, Philips International BV
• Consequences
• for legitimate business

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• Subjects
• VAT fraud
• Types of revenues loss
• Whose issue?
• Consequences for legitimate business
• How to combat fraud?

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• VAT FRAUD
• Types of revenue loss
• Bankruptcy
• on purpose
• because of market developments
• Usual black economy
• Missing trader
• VAT is charged but not reported/paid
• Carrousel fraud
• Fake exports

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• VAT Fraud Whats new?
• The current missing trader fraud
• and carrousel fraud is
• pan European
• and
• very well organized

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• Whose issue?
• This is not only a
• government and/or business issue!
• This is a society issue!

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• Consequences for legitimate business
• Fraud leads to
• market distortions no level playing field
• abuse of goods and brand brand image
• Create awareness to avoid to get involved
• Anti fraud legislation
• Reverse charge in UK system changes!
• Joint and several liability
  uncertainty! Fair?
• More reporting, change of the VAT system ??

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• How to combat fraud?
• Business should report as much as possible?
• Change the system of VAT?
• Government should perform targeted audits based
  upon risk management?

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• VAT fraud how to continue?
• Create trust, relations and partnerships with all
  the stakeholders in the (EU) society.
• Improve information/knowledge management e.g.
• Information is with the supplier, the customer,
  the banks, the advisors, the transport companies,
  forwarders etc. etc.
• Improve VIES
• for government a tool for a better risk
  management approach
• for business a tool to rely on (SAFE HARBOUR)
• Better administrative cooperation (proper
  exchange and use of relevant information)
• TAXinterpol?
• Proper resources
• Audits based upon risk management

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• Pauze

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• Redmar Wolf
• Baker McKenzie
• Case Law
• Struggling with carousel fraud

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The first carousel...
supplier
export refund 9
customer
intermediary
import levy 4
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• Export refund gt levy on import
• creating transactions to exploit difference
• Dutch court rejects export refund fraus legis
  (1968)
• ECJ rejects export refund - abuse
  (Emsland-Stärke GmbH, C-110/99, 2000)

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The goods
MT a.k.a. ploffer
19 VAT
0 VAT
0 VAT
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The VAT...
MT a.k.a. ploffer
Tax Man
Refund?
ringmaster on the beach
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• Challenge the refund
• bubble memory boards - Benelux(1988-1992)
• fictitious transactions schijnhandeling
• proof of awareness
• fraus legis? no tax profit transactions do not
  lower the tax due (BNB 1998/35 and BNB 1998/36)

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• Challenge the refund
• formalities, invoicing requirements
• supplier does not exist...
• if well structured, refund must be paid out
• 2003 introduction of joint and several liability
  

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• Consultation of ECJ
• transactions within the carousel lack economic
  purpose (UK)
• transactions with MT are void (Belgium)
• joint and several liability EU proof?

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• Consultation of ECJ
• Bond House / Optigen / Fulcrum 12 January 2006
• FTI11 May 2006
• Kittel / Recolta6 July 2006
• Teleos Colleé Twoh27 September 2007

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Optigen / Bond House/Fulcrum
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• Goods news for traders...
• transactions in carousel are not outside scope
  vat
• right to deduct prevails, even when agreement is
  legally void

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• ECJ offers a certain protection
• only for traders who take every precaution
  which could reasonably be required of them to
  ensure that their transactions are not connected
  with fraud, be it the fraudulent evasion of VAT
  or other fraud

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• Goods news for customs...
• know or should have known about fraud... no
  refund
• based on objective factors

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• ECJ on activities of missing trader...
• the objective criteria which form the basis of
  the concepts of supply of goods effected by a
  taxable person acting as such and economic
  activity are not met where tax is evaded by the
  taxable person himself

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Refund / zero rate
every precaution...
does not know or should have known...
every precaution?
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• Carla van Rijn
• Tax Authorities, FIOD-ECD

VAT Carrousel Fraud
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B (NL)
A (GB)
C (NL)
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• We fight VAT-fraud
• Fraudsters adjust and change their
• strategy

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• Principle Olympic rings
• Deliveries from one to the other organisation

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• Deny zero rate if you do not know
• with whom you are trading
• Your delivery must be submitted
• to ICA in other member state
• do not trade with strawmen

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• Kittel en Recolta
• Know or should have known
• And we will wait for the reaction..

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• Handelsblatt, 03-08-2005
• Organisierte Kriminalität nutzt Schwächen gezielt
  aus
• Rechnungshof Leichtes Spiel für Steuerbetrüger
• Der Bundesrechnungshof kommt in einem
  vertraulichen
• Prüfbericht für das Bundesfinanministerium zu dem
  
• Ergebnis, dass Umsatzsteuerbetrug in groBem Stil
  im
• Rahmen Organisierter Kriminalität und häufig
  gepaart
• mit anderen Delikten begangen wird."
• Der 100-seitige Bericht, der dem Handelsblatt
  vorliegt,
• nennt als Beispiele Insidergeschäfte,
  Anlagebetrug,
• Geldwäsche, Verbrauchsteuerhinterziehung und
• sogar die Terrorismusfinanzierung

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• Dank u voor uw aandacht
• Heeft u nog vragen?
• Deze beantwoorden wij graag tijdens de borrel

Han Tijnagel Coördinator TDB Han.tijnagel_at_europese
fiscalestudies.nl
Klaas Meenhorst Coördinator TDOU Klaas.meenhorst_at_e
uropesefiscalestudies.nl
Sjoerd Janssen Coördinator TIB Sjoerd.janssen_at_euro
pesefiscalestudies.nl