EU reports on EC Sales Lists
Following the introduction of monthly EC Sales Lists (‘ESL’) in 2010, the European Commission has reviewed progress in the aim to help reduce VAT fraud.
ESL are reports by VAT registered traders of the sales to other traders VAT registered in other EU countries. They enable countries to review and verify that VAT has been correctly treated by companies in different countries. They typically require traders to list their foreign counter parties, their VAT supplies and amounts.
Prior to 2010, they were only required on a quarterly basis. The increase in frequency of reporting was to help reduce the opportunities for fraudsters to exploit the VAT zero-rating on intra-community supplies. In addition, they were only required for the provision of goods. This was extended to services in 2010.
Progress has been slow. For instance, seven states still require paper filings. Over ten states failed to offer companies the reduced quarterly filing facility if their annual trading fell below a certain amount. In addition, it was estimated that the costs of the new regime were almost €5,000 per company per annum.