A Brief Guide to CESOP

[vc_row row_height_percent=”0″ override_padding=”yes” h_padding=”2″ top_padding=”2″ bottom_padding=”4″ overlay_alpha=”50″ gutter_size=”3″ column_width_percent=”100″ shift_y=”0″ z_index=”0″ uncode_shortcode_id=”102551″][vc_column column_width_use_pixel=”yes” gutter_size=”3″ overlay_alpha=”50″ shift_x=”0″ shift_y=”0″ shift_y_down=”0″ z_index=”0″ medium_width=”0″ mobile_width=”0″ width=”1/1″ uncode_shortcode_id=”162130″ column_width_pixel=”750″][vc_column_text uncode_shortcode_id=”109005″]CESOP (Central Electronic System of Payment information) is a new system established by the EU to combat e-commerce VAT fraud. Starting from January 1, 2024, Payment Service Providers (PSPs), including Credit institutions, E-Money Institution, Payment Institutions and Post office GIRO institutions in the EU, must report specific cross-border transactions involving an EU-based payer to National Tax Authorities (NTAs), in a structured XML format on a quarterly basis. The data is then transferred by the NTAs to CESOP and will be used to detect VAT non-compliance.

Payments in Scope

Reportable payments include cross-border card payments, credit transfers, direct debits, e-money, e-vouchers, e-wallet payments, and money remittance transactions from an EU-based payer, if more than twenty-five cross-border payments being made to the same payee in a calendar quarter.

Payments from a payer not in a Member State to a payee in a Member State are considered out of scope.

Reporting obligations

The data to be reported includes ID of the reporting PSP, payee information (name, VAT ID/TIN, account ID, address, and PSP BIC/ID), payment/refund transaction details (date/time, amount, currency, and transaction ID), country codes of the Member States, payer location, and physical presence indication with reference.

The reporting deadlines are as follows:

• 1st Period (January- March): 30 April
• 2nd Period (April-June): 31 July
• 3rd Period (July-September): 31 October
• 4th Period (October- December): 31 January

What does this mean for you?

For PSPs operating within the EU, it is crucial that you identify in-scope establishments/branches & payments, assess whether your systems capture the data required for reporting purposes, and then collect, process, & report data in the required xml format within the deadlines in all EU Member States where you operate. This may mean you need to register with up to 27 different tax authorities ahead of the reporting deadline.

How can Tax Desk help?

Tax Desk (taxdesk.com) offers a fully managed CESOP solution including:

• CESOP Registration in all EU member states
• Automated CESOP report generation for all EU member states
• Quarterly CESOP report submissions in all EU member states
• Local engagement support with relevant authorities across the EU
• Notification handling in all EU member states
• Dedicated Account Manager

Find out more at https://taxdesk.com/cesop/ or contact us at info@taxdesk.com[/vc_column_text][uncode_share layout=”multiple” no_back=”yes” separator=”yes”][/vc_column][/vc_row]