Tax provisions – Harmonisation of laws – Common system for the exchange of information – Administrative cooperation in the field of value added tax – Court of Auditors’ audit powers – Scope
(Art. 248(1) to (3) EC; Council Regulation No 1798/2003)
A Member State that objects to the Court of Auditors of the European Union’s conducting of audits in that Member State concerning administrative cooperation under Regulation No 1798/2003 on administrative cooperation in the field of value added tax and the provisions for its implementation fails to fulfil its obligations under Article 248(1) to (3) EC.
Article 248 EC, which explains how the Court of Auditors is required to perform its task of carrying out audits provides that it is to examine the accounts of all revenue and expenditure of the Community, the legality and regularity of that revenue and expenditure, and whether the financial management has been sound. Article 248(3) EC empowers the Court of Auditors to carry out audits based on records and, if necessary, on the spot, including in the Member States.
The system of own resources established pursuant to the Treaty is designed, as regards resources accruing from value added tax, to create an obligation on the part of the Member States to make available to the Community as own resources a proportion of the amounts which they collect as that tax. In so far as they are intended to combat value added tax fraud and avoidance, the mechanisms of cooperation to which the Member States are subject by virtue of Regulation No 1798/2003 are themselves capable of having a direct and fundamental impact on the effective collection of value added tax revenue and, therefore, on the availability to the Community budget of resources accruing from value added tax. Thus, the effective application by a Member State of the rules on cooperation established by Regulation No 1798/2003 is likely to determine not only that Member State’s ability to take effective measures to prevent tax evasion and tax avoidance in its own territory but also the ability of the other Member States to take such measures in their own territories, especially where the correct application of value added tax in those other Member States depends on the information held by that Member State.
The audit by the Court of Auditors in relation to administrative cooperation under Regulation No 1798/2003 did therefore deal with Community revenue from the aspect of its legality and its sound financial management, and thus had a direct link with the powers conferred on the Court of Auditors by Article 248 EC.
(see paras 59-61, 71, 77, 79, 81, operative part 1)