A new Tax and Duty Manual has recently been released by the Irish Revenue regarding the reporting requirements for Payment Service Providers (PSPs) on cross-border payments through the EU Central Electronic System of Payment Information (CESOP). This manual aims to provide comprehensive guidance on the new record-keeping and reporting obligations imposed on EU payment service providers who facilitate cross-border payments. The introduction of these obligations is part of the EU’s eCommerce VAT package, which seeks to tackle VAT fraud and manage VAT risks effectively. Under this new system, PSPs will be required to report relevant information to the Revenue, which will then be transmitted to CESOP. It is important to note that these legislative changes will come into effect from 1st January 2024.
The publication of this Tax and Duty Manual is a significant development in the ongoing efforts to combat VAT fraud and ensure the proper management of VAT risks within the EU. The manual offers detailed guidance to PSPs, helping them understand their reporting obligations and ensuring compliance with the new requirements. By providing clear instructions and explanations, the Revenue aims to facilitate a smooth transition for PSPs and minimize any potential disruptions to their operations.
The implementation of these reporting requirements is a crucial step in addressing the challenges posed by VAT fraud in cross-border transactions. VAT fraud has been a persistent issue within the EU, leading to significant revenue losses for member states. By mandating PSPs to report relevant information on cross-border payments, authorities will have access to valuable data that can be used to identify potential instances of VAT fraud and take appropriate action. This proactive approach is expected to enhance the overall integrity of the VAT system and protect the interests of both businesses and consumers.
The new reporting obligations will apply to all EU payment service providers involved in facilitating cross-border payments. This includes PSPs that offer services such as online payment processing, electronic fund transfers, and mobile payment solutions. These providers play a crucial role in enabling seamless cross-border transactions, and their collaboration is vital in ensuring the effectiveness of the new reporting system.
To comply with the new requirements, PSPs will need to maintain accurate records of relevant payment information, including the amount, currency, date, and the identity of the parties involved in the transaction. These records will need to be retained for a specified period, as outlined in the Tax and Duty Manual. PSPs will then be required to report this information to the Revenue, who will transmit it to CESOP. The details of the reporting process, including the format and frequency of reporting, are outlined in the manual, providing PSPs with clear instructions on how to fulfill their obligations.
It is important for PSPs to familiarize themselves with the new reporting requirements and ensure that their systems and processes are updated accordingly. Failure to comply with these obligations may result in penalties and other enforcement actions. Therefore, it is advisable for PSPs to seek professional advice and guidance to ensure full compliance with the new regulations. The Revenue has also indicated that they are available to provide assistance and support to PSPs during the transition period.
In conclusion, the publication of the Tax and Duty Manual on reporting requirements for Payment Service Providers on cross-border payments is a significant development in the EU’s ongoing efforts to combat VAT fraud and manage VAT risks effectively. By mandating PSPs to report relevant information to the Revenue, authorities will have access to valuable data that can be used to identify instances of VAT fraud and take appropriate action. It is crucial for PSPs to familiarize themselves with the new obligations and seek professional advice to ensure compliance. The Revenue is also committed to providing support and assistance to PSPs during this transition period. With the implementation of these new reporting requirements, the EU aims to strengthen the integrity of the VAT system and protect the interests of businesses and consumers alike.