The EU Commission has launched proposals to start negotiations with Russia and Norway on administrative cooperation agreements in the area of VAT. The objective of these agreements would be to establish a framework of mutual assistance in combatting cross-border VAT fraud and in helping each country recover the VAT it is due. According to the Commission, VAT fraud involving third-country operators is particularly at risk in the telecoms and e-services sectors.

The cooperation agreement would be based on the Regulation on administrative cooperation in the field of VAT, which currently sets the framework for intra-EU collaboration in this area. Among the ways in which Member States cooperate against VAT fraud are by allowing each other access to their data bases, and exchanging information (either automatically or on request) on taxpayers’ activities. The use of such instruments could be extended to third countries through cooperation agreements against VAT fraud. The EU intends to negotiate such agreements with neighbouring countries, its main commercial partners and countries to be considered leaders in the field of electronically supplied services. For now, exploratory talks have been initiated with Norway, Russia, Canada, Turkey and China. Both Norway and Russia have already indicated that they are now ready to start official negotiations.

For further information see the Commission’s website.