EC “Budget for Europe 2020” – Customs Union and Taxation

POLICY
One of the cornerstones of the internal market is the customs union. It enables a borderless internal market to function by ensuring that goods originating in third countries comply with agreed rules upon entry or release into circulation, and can thus move freely within the internal market. The customs union is also the operational arm of the common commercial policy, implementing bilateral and multilateral trade agreements, collecting duties, applying trade measures (such as rules of origin), embargoes and other restrictions.
In addition, customs increasingly has a protective function, such as contributing to the security of the supply chain, the fight against terrorism and international crime (e.g. money laundering, drug precursors and the illegal trade in weapons) and the enforcement of intellectual property rights at the border. It contributes to a level playing field by ensuring that imported goods comply with the same technical, health and safety standards as EU goods.
International trade is steadily expanding and efficient import and export processes are crucial for the competitiveness of the EU economy. At the same time, security and safety risks are growing. The EU therefore faces a double challenge which will shape its priorities for the future: to facilitate the flow of goods for legitimate traders while at the same time protecting citizens against risks to their safety and security.
National customs officials are responsible for the smooth functioning of the customs union on a day-to-day basis. This requires intense operational networking between customs administrations, including through cutting-edge IT infrastructure and systems that allow them to act as a single world-class customs administration. Funding certain actions through the EU budget instead of separate national programmes makes economic sense. That is why an EU-funded programme – the Customs cooperation programme – supports this networking and cooperation in a variety of practical ways.
EU businesses and citizens face a variety of tax-related obstacles when engaging in cross-border activities. Such obstacles result from fragmentation and divergence in the way that the same transactions are treated in different Member States. This is why the removal of these barriers and the pursuit of further tax co-ordination between the Member States – in full respect of Member State competences in this area – is one of the priorities for strengthening and deepening the single market.
Tax fraud has been and continues to be a serious challenge for the EU and the Member States, all the more so at a time when fiscal discipline is paramount. The fight against tax fraud within the single market is therefore high on the agenda of EU taxation policy. To combat fraud within the single market, strong administrative co-operation arrangements between Member State tax administrations and the efficient sharing of information on transactions, businesses or fraud schemes is necessary. For example, the fight against VAT and excise fraud is greatly facilitated by systems allowing for the rapid exchange of information between administrations.
The EU plays an indispensable role in assisting Member States in putting in place the necessary systems and processes for effective cross-border cooperation. In particular, the Fiscalis cooperation programme is pivotal in facilitating this cooperation, thereby adding value to the Member States’ own efforts in this area.

INSTRUMENTS
The Commission proposes a new generation of Customs (“Customs 2020”) and Taxation (“Fiscalis 2020”) programmes.
Both programmes will be instrumental in supporting and strengthening the internal market in the decade to come. The benefits will be enjoyed by all stakeholders through a more efficient and secure business environment, greater safety and security for citizens, and more efficient and effective implementation of public policy for governments.
These programmes will help the tax and customs administrations of the Member States to interact more efficiently, supported by modern and efficient information-exchange systems to facilitate legitimate trade while combating fraudulent activities. Such pan-European facilities can be provided most efficiently and economically at EU level. For example, the availability of a European-wide secure trans-European computer network interconnecting the customs and tax administrations generates annually a saving of €35 million for Member States, while costing only €11 million at the central EU level.
The programmes will support the following activities:
•Trans-European IT systems to share data and processes between national customs and taxation authorities through interoperable IT applications allowing administrations to cooperate and ‘act as one’ and further enhancing the e-administration for businesses and citizens;
•Reinforced human networks and competency building to stimulate practical cooperation, knowledge sharing, and the identification and dissemination of best practices and training between national customs officials, national tax officials, and trade representatives;
•Infrastructure capacity building to co-finance the purchase of specific operational equipment required for performing customs control and surveillance tasks at the EU’s external borders, which is in the interest of all Member States.

IMPLEMENTATION
The Customs and Fiscalis programmes are implemented in a priority-based manner. Work programmes are established – together with the stakeholders – stipulating the priorities for a specific period. The legal bases of these programmes will be re-designed to move them from annual to multi-annual work programmes and to simplify current arrangements.
The direct central management mode currently in place will be retained and fully streamlined for both programmes in order to ensure maximum efficiency in terms of daily management support at Commission and national level and to allow for a better understanding of the implementing rules by all stakeholders.

Procurement contracts, accounting for the largest part of the programmes’ budget, will mainly be executed by the Commission in accordance with EU rules and by using common quality assurance and acceptance rules.
Both programmes are designed so that the EU can react appropriately and quickly in fast-evolving situations. Having a tailor-made toolbox at the programmes’ disposal as well as a flexible mechanism for the submission of proposals will enable the efficient implementation of programme activities.
There is a clear case for applying more alternative financing methods to cover participation and organisational costs. The Commission will replace (at least partially) the current application of actual costs with the payment of lump sums.

PROPOSED BUDGET ALLOCATION FOR 2014-2020
All figures in constant 2011 prices
Total proposed budget 2014-2020
For Customs 2020 and Fiscalis 2020 €690 million