EU cracks down on VAT fraud with new cross-border payment rules in 2024
New EU rules on cross-border payment reporting will take effect from January 2024. The legislation targets VAT fraud by requiring payment service providers to share transaction data with tax authorities. No member state had introduced similar national measures before this change.
The updated law expands the definition of payment service providers. It now covers credit institutions and certain foreign credit firms. Any provider handling 26 or more cross-border payments to the same recipient in a quarter must report the details.
These reports must reach the Tax Agency by the end of the following month. The agency will then forward the data to the European Commission for storage in the Central Electronic System of Payment information (CESOP). EU countries can access this data under strict conditions to fight VAT fraud. Providers failing to comply may face documentation and reporting fees. Some fees related to personal or financial details will also be taxable, subject to confidentiality rules. All payment records must be kept for three full calendar years.
The regulation comes into force on 1 January 2024. It introduces stricter oversight of cross-border transactions across the EU. Tax authorities will gain new tools to detect and prevent VAT fraud through shared payment data.
