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.
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.
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.
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.
The Chartered Institute of Taxation (CIOT) is pleased to have been asked to comment on the Working Papers 4 to 6 in respect of the OECD Tax Intermediaries Study. Wewelcome the attempt to reduce the burdens placed upon taxpayers and their agents by reducing their contact with revenue bodies. We have tried to respond fully to this very important consultation, but we are conscious that our paper has been prepared under resource constraints caused by a need to cover a plethora of consultations from HM Revenue and Customs (HMRC).
The CFE welcomes the consultation of the European Commission on modernising the Value Added Tax treatment of vouchers and related issues and appreciates the detailed analysis made by the Commission’s services on the existing praxis and the forecast of future uses of vouchers.