The Tax Law Academy Seminar Series

Technology has an important role to play in shaping the future of EU VAT. It has already been to a large extent relied on by tax administrations in many of the Member States. Electronic reporting, e-invoicing, split-payment and algorithm based transaction analysis tools have been helping to combat VAT fraud. Fraud erodes budgets of states and leads to distortions of competition. It affects honest businesses and consumers and violates the very fundaments of the EU Internal Market. Technology can also facilitate compliance and protect honest taxpayers from otherwise severe consequences of  fraud committed by their contractors (including a denial of the right to deduction and exemption). European Commission has announced to present a legislative proposal for modernising VAT reporting obligations which will ensure detailed and possibly real-time exchange of information on VAT intra-EU transactions. With the main focus being on fighting tax abuse, avoidance and evasion, as well as advancement of technologies and their use in VAT, significantly less attention has been devoted to the challenges for taxpayers’ rights, such as the right to privacy and protection of personal data and the right of defence,  which technology brings about. Proving for limits for the state’s authority taxpayers’ rights are a crucial element of a democratic state governed by the rule of law.  Against that backdrop, it is timely to address the question on the normative value and content of taxpayers’ rights in the context of new technologies and consequently on the requirements or limits which must be respected when designing and using technology in VAT administration. At the seminar, the identified challenges and  formulated recommendations as to the future regulation of technology in VAT will be discussed.