Updated guidelines on new reporting obligations for payment service providers

The guidelines detail the scope of the new rules, based on which payments service providers established in the European Union will be obliged to keep records and inform national financial administrations about cross-border payments made to suppliers of cross-border purchases that are the beneficiaries of such payments (“payees”). Payment service providers operating in EU countries will have to monitor payees of cross-border payments and inform the financial administration of those receiving more than 25 payments per calendar quarter. The new rules will enter into force on 1 January 2024. They have been implemented into the Slovak legislation via Article 70a of the VAT Act.

The records obtained from payment service providers will then be submitted by EU Member States to the Central European Payment System (CESOP), where the data obtained will be subjected to risk analyses, cross-checks, and subsequent evaluation. The new rules aim to give financial administrations within the EU sufficient tools to detect tax fraud more easily in cross-border e-commerce transactions.

The updated version of the Guidelines contains, inter alia, specifications concerning the determination of location of the payer and the payee. The European Commission has also published an updated series of frequently asked questions and answers.