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Taxation and Customs 2022

2022 Annual Report on monitoring the application of EU law - Infringement cases by policy area

Infringement cases open at year-end 2018 - 2022

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By clicking on the multi-level chart, you can consult, for 2022, the number of infringement cases open at the year-end per policy sector and per type of infringement.

Compliance promotion activities in 2022

Guidelines on how to implement EU law

With a view to fight e-commerce VAT fraud, as from 1 January 2024, payment service providers will have to transmit information on cross-border payments originating from Member States and on the beneficiary. This information will then be centralised in a European database, the Central Electronic System of Payment information. To promote a correct transposition, implementation and application of this obligation, the Commission published guidelines for Member States and businesses.

New rules will update and modernise the special VAT rules for small and medium-sized enterprises as from 2025. The related VAT exemption will also apply to non-established EU businesses. The work needed for the implementation by Member States started in 2022, with focus on the IT system that must be put in place. To that end, the Standing Committee on Administrative Cooperation approved the functional specifications which will guide that part of Member States’ work.

Following the entry into force of the Union Customs Code (May 2016), the Commission published several guidance documents to ensure uniform implementation of this new legislation. These guidance documents are regularly updated, also in 2022, to take into account new developments, questions raised and problems faced by Member States. Such updates and questions are discussed in the framework of the customs expert group which meets regularly in different constellations depending on the topic.

Meetings with Member States

On EU VAT policy, the Commission organised two meetings of the VAT Committee to discuss with Member States questions on the application of EU rules. The meetings focused on the implementation of the new VAT e-commerce rules applicable since 1 July 2021. The committee agreed:

  • guidelines on measures to avoid double taxation under the electronic portal businesses which facilitates compliance with VAT e-commerce obligations on distance sales of imported goods;
  • updating the guidelines on the treatment of VAT groups;
  • guidelines on the determination of the Member State entitled to charge VAT on the supply of liquefied natural gas and of dietary recommendations.

The Commission also organised IT workshops with Member States to ensure the correct implementation of the VAT e-commerce rules.

Under the Trade and Cooperation Agreement with the United Kingdom, a meeting of the trade specialised committee was held to: a) take stock of the administrative cooperation and recovery assistance in 2022 and, b) present the state of play on the implementation of the Protocol on administrative cooperation and combating fraud in the field of VAT and on mutual assistance for the recovery of claims relating to taxes and duties.

Following adoption of the Directive on administrative cooperation in the field of taxation for income generated by sellers on digital platforms (DAC7), the Commission engaged with Member States in preparatory work to ensure the timely and correct implementation of the Directive into their national law by 31 December 2022. The Commission organised three meetings in the field of direct taxation on the issue of administrative cooperation:

  • A meeting of the expert group ‘Working Party IV – Direct Taxation’, focused on explaining the implementation of platform operators in the field of direct taxation (DAC7), in which the Commission presented replies to questions asked by Member States for clarification.
  • Two meetings of the Working group on administrative cooperation in direct taxation (WG ACDT), an expert group in which the Commission focused on how to implement the new requirements concerning the content of exchanges under Council Directive (EU) 2015/2376 (DAC3). Therein, the Commission explained the content of the new requirements and established a sub-group to draft a template to be used by all Member States (subgroup starting in 2023).
  • Furthermore, the Commission also organised a special meeting of the expert group ‘Working Party IV – Direct Taxation’, to gather information on how Member States implement certain national measures or provisions of existing EU Directives in the field of direct taxation, and establish a consistent view across Member States to ensure the correct implementation of EU law.

In the field of customs, the Commission chairs the Customs Expert Group, which meets on a very regular basis in different constellations depending on the topic (16 sub-groups). These expert groups in different fields of customs provide for mutual assistance between the Commission and Member States for the purpose of the implementation of existing Union legislation. Regulations are directly applicable in Member States and this expert-group based on cooperation with Member States allows to avoid infringement procedures before they happen, as it contributes to the alignment of Member States’ implementation of rules in compliance with the Union legislation. In 2022, 51 such expert group meetings were held.

Package meetings

Package meetings are meetings between the Commission and a Member State to discuss implementation issues and infringement cases in a given policy area. They can be held before the Commission has detected a breach of EU law or concern existing EU Pilot or infringement cases of the Member State. Package meetings can be an efficient tool to deal with challenges a Member State may face in a policy area, across different acts of EU legislation. The Commission held the following package meetings with Member States in the policy area of taxation:

  • On indirect taxation, the Commission organised package meetings with Germany and Greece to discuss pending investigations against those Member States.
  • On direct taxation, the Commission organised package meetings with Germany, Spain and Sweden to discuss pending investigations against those Member States.

Follow-up given to petitions

  • In the field of direct taxation, the Commission followed-up on a petition concerning an alleged infringement of the Austrian legislation in relation to the possibility to benefit from exemption(s) of the property sales tax on the sale of real estate that has served as the taxpayer’s main residence (Petition 0219/2022). The Commission did not identify any violation of EU law and decided that there is no further action needed on the matter.
  • The Commission also followed-up on a petition setting out a case in which the Spanish tax authorities required taxpayers residing in Spain to submit information about any assets and real estate located abroad (Modelo 720) (Petition 0204/2021). In 2014, the Commission had opened an infringement procedure where it concluded that the special penalties associated with the failure to properly meet this information obligation were disproportionate and contrary to the principle of the free movement of capital. Since Spain did not amend its legislation, the Commission referred the case to the Court of Justice of the European Union (case C-788/19). In 2022, the Court upheld the Commission’s position (ruling of 27 January 2022) that the penalty regime violated Article 63 TFEU on the free movement of capital. Following this judgment, Spain amended its legislation by Law 5/2022, of 9 March 2022, whereby it derogated the special penalty regime and resolved the breach of EU law.
  • The Commission did not receive or handle a petition concerning indirect taxation in 2022.
  • The Commission received and handled two petitions in the field of customs concerning an alleged breach of EU law: one petition raised issues in relation to transparency in the application of rules on VAT and customs charges on goods coming from third countries (Petition 0449/2022) while the second petition referred to an alleged breach, by the Hellenic Post (ELTA), of EU rules on customs clearance for parcels coming from outside the EU (Petition 1028/2021). In follow-up to the allegations brought forward by the two petitions, the Commission initiated EU Pilot processes with the respective Member States.

Important Court of Justice rulings against Member States

  • Commission v United Kingdom (Lutte contre la fraude à la sous-évaluation), C-213/19; 
  • Commission v Poland (Taxation des produits énergétiques), C-139/20; 
  • Commission v Belgium (Déduction des rentes alimentaires), C-60/21; 
  • Commission v Spain (Obligation d’information en matière fiscale), C-788/19.

Important preliminary rulings

Outlook for 2023

In 2023, the Commission will continue important enforcement work in the area of Taxation and Customs.

In the area of customs, the Commission plans to:

  • keep shifting its work from complaints-driven investigations to more own-initiative investigations (including horizontal initiatives), based on information obtained from different sources;
  • regularly update the various guidance documents on the Union Customs Code, in cooperation with Member States, to help Member States implement it;
  • focus on cases and compliance issues with a significant financial impact for the Union budget, or when it is considered that EU exclusive competence in the customs field must be defended with regard to the fundamental principles of customs law.

In the area of indirect taxation, the Commission plans to:

In the area of direct taxation, the Commission plans to:

  • begin its work assessing national measures’ compliance with EU rules on the mandatory automatic exchange of information in the field of taxation in relation to platform operators (Council Directive (EU) 2021/514/EU amending Directive 2011/16/EU on administrative cooperation in the field of taxation);
  • continue the assessment of national measures’ compliance with EU rules on exchange of tax information. This will concern in particular the directives on:
    • access to anti-money laundering information (Council Directive (EU) 2016/2258/EU amending Directive 2011/16/EU on administrative cooperation in the field of taxation);
    • mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements (Council Directive (EU) 2018/822/EU amending Directive 2011/16/EU on administrative cooperation in the field of taxation);
  • continue the assessment of the completeness and conformity of national rules against tax avoidance and practices that directly affect the functioning of the single market (Council Directive (EU) 2016/1164/EU) and as regards hybrid mismatches with non-EU countries (Council Directive (EU) 2017/952/EU);
  • continue the assessment of the conformity of national rules on tax dispute resolution mechanisms in the EU (Council Directive (EU) 2017/1852/EU);
  • focus on infringements in direct taxation with a strong impact on the single market and on competition.