Estonia, EU – Baltic States, Financial Services, Internet, Technology

The package of bills would propose to implement cooperation between payment service providers and tax authorities, where payment service providers must start documenting data regarding cross-border transactions across payment recipients and forward the documented data to the tax authority of their member country, government spokespeople said.

Data would have to be collected about all payment recipients who receive over 25 cross-border payments per quarter. The tax authorities of all member states would have to start forwarding data collected within the member state to a new central electronic payment information system of the EU. According to the European Commission, this would enable officials fighting fraud to compare data with the value added tax (VAT) information in their possession and detect or investigate VAT fraud suspicions.

The finance minister said he does not support the package as he finds that the volume of data to be collected from payment service providers is not in proportion with the volume of data that is actually beneficial for a VAT-related risk analysis. In addition, Estonia would see significantly greater expenses from the collection, preservation and forwarding of data to a central EU database than is the estimated sum of additional VAT to be detected.

At the same time, Toniste is to propose to support the EU's e-trade VAT implementation package and its implementing provisions.

The VAT directive and VAT system implementation regulation of the Council of the European Union is to be changed in relation to an e-trade VAT directive adopted in December 2017. The e-trade VAT directive made electronic interfaces like markets, platforms and portals responsible for the payment of VAT in the case that third country companies sell goods to EU consumers via those interfaces in the amount of up to 150 euros.

The proposals will establish concrete terms on what kind of electronic interfaces must start assuming responsibility for VAT payment. In addition, more detailed rules will be implemented so that the changes would not be accompanies by any kind of unreasonable administrative burden on the marketplaces and platforms.

Estonia also supports conditions that will be the basis for determining which marketplaces, platforms and portals will be responsible for the payment of VAT in the case of such transactions where third country vendors sell goods to EU consumers via the interfaces.

With these kinds of terms, as many interfaces as possible will be involved and this will better ensure the payment of VAT compared with a situation where, in terms of the supplies of third country companies, each entrepreneur would be separately responsible for VAT. Estonia also supports principles that help ensure that interfaces would not receive an excessive administrative burden with the changes.