According to a statement the Commission proposes a new Community approach to administrative cooperation with third countries and is prepared to engage in a broad discussion on the need to modify VAT systems. Among the proposals are:

• Strengthening of current legislation regarding cooperation in the field of direct taxation and assistance in the recovery of taxes
• New Community approach to cooperation with third countries
• Modifying the current VAT system-the Commission is seeking a debate on the possibility of strengthening the principle of joint and several liability for the payment of tax. It is also prepared to consider extending the reverse charge mechanism to domestic transactions in a Member State.
• Increasing tax declaration obligations for companies considered to represent a risk
• Reducing these obligations for companies which obtain an authorisation by entering into a partnership with the tax authorities – shades of cooperative compliance framework here

Although any attempts to reduce tax fraud are to be welcomed, there is usually a downside for compliant businesses; tax compliance processes become more onerous. ICAI will follow and participate in the debates on the area over the coming months.