Opinion Statements 2007

We refer to the updated draft of the report on the OECD Study on Tax Intermediaries which was kindly circulated to us for comment on 19 November by email. Thank you once again for the opportunity to comment upon the work result of the Study Team. Looking back to the debate on the occasion of the CFE conference on 19 November in Brussels, we have arrived at a position we are in general pleased with. We hope to continue constructively in future.

We have already commented on the original draft report (comments submitted to you on 14 November 2007). In the present paper we comment only on new Chapter 2 (executive summary).

We refer to the updated draft of the report on the OECD Study on Tax Intermediaries which was kindly circulated to us for comment on 19 November by email. Thank you once again for the opportunity to comment upon the work result of the Study Team. Looking back to the debate on the occasion of the CFE conference on 19 November in Brussels, we have arrived at a position we are in general pleased with. We hope to continue constructively in future.

We have already commented on the original draft report (comments submitted to you on 14 November 2007). In the present paper we comment only on new Chapter 2 (executive summary).

This Opinion Statement aims at reconstructing the concept of abuse in European tax law.Reference to abuse has become a regular feature in the tax judgements of the European Court of Justice. However, linguistic and conceptual discrepancies arising from such judgements make the concept of abuse far from being clear. In particular, this Opinion Statement will reach its conclusion after analysing  the differences traditionally existing in international tax law between avoidance, evasion and fraud, their respective relationships to abuse and the problems of terminology of abuse in a multilingual legal system such as European law.

This Opinion Statement aims at reconstructing the concept of abuse in European tax law.Reference to abuse has become a regular feature in the tax judgements of the European Court of Justice. However, linguistic and conceptual discrepancies arising from such judgements make the concept of abuse far from being clear. In particular, this Opinion Statement will reach its conclusion after analysing the differences traditionally existing in international tax law between avoidance, evasion and fraud, their respective relationships to abuse and the problems of terminology of abuse in a multilingual legal system such as European law.

We refer to the draft report on the OECD Study on the Role of Tax Intermediaries which was kindly circulated to us for comment on 2 November 2007. We appreciate the opportunities we have been afforded to express our views on this Study throughout its existence. We welcome the occasion to make the following comments regarding the draft report. We also acknowledge the consultative process undertaken by the Study group and, as is reflected in paragraph 10 of Chapter 3, that the consultations had direct influence on the report.

We refer to the draft report on the OECD Study on the Role of Tax Intermediaries which was kindly circulated to us for comment on 2 November 2007. We appreciate the opportunities we have been afforded to express our views on this Study throughout its existence. We welcome the occasion to make the following comments regarding the draft report. We also acknowledge the consultative process undertaken by the Study group and, as is reflected in paragraph 10 of Chapter 3, that the consultations had direct influence on the report.

The CIOT supported a limited reverse charge covering goods most closely linked to goods when previous consultations were undertaken on the combating of fraud. However, even at that stage, the CIOT suggested that a better solution would be to look to more real-time monitoring of significant transactions. This was because, based on values that were disclosed in cases in the United Kingdom, it appeared that the major frauds involved relatively high value transactions. There were also suggestions at the time by the Government that, in fact, the vast majority of “MTIC” or “carousel” frauds were being undertaken by a very small number of crime gangs.

Our objections and estimates take in consideration all the scenarios and possible administrative problems as outlined in the study. We should outline at the start that any time there is a financial limit in tax one creates a risk for error and complexity. CFE would support there fore a more general reverse charge mechanism rather than a partial one.

The CFE recommends that uniform rules regulate claims for refunds of VAT paid in error. The time limits for making claims against the tax authorities should be the same as the periods in which it is open to tax authorities to raise assessments for under declared tax caused by deduction of VAT not due on the invoice. To avoid the possibility of claims by customers against their suppliers when their suppliers are unable to collect sums paid in error to tax authorities; similar time limits should also apply to claims between customers and their suppliers. National legislation should not be seeking to penalise customers or their suppliers in these circumstances.

While CFE has already expressed many of the views of our members to the Study Group, we thought it timely and appropriate to write to you to formally express our views on one fundamental aspect of the draft working papers as published on the website. Prior to doing so we wish to acknowledge the recognition within the working papers of the role of tax advisers in the functioning of tax administrations.