From January 1, 2024, payment service providers (PSPs) operating in the EU will be obliged to monitor cross-border payments and provide information about them to tax authorities in the EU member states.
This EU-wide European Council Directive is aimed at reducing VAT fraud. PSPs will be obliged to report transactions when they process over 25 payments to the same payee in one quarter. The cross-border payments in question are both intra-European and from third countries.
In order to simplify information sharing between the EU member states, the data will be shared in a harmonized format via a new central electronic system of payment information (CESOP).
Despite their size, all payment service providers, including electronic money institutions, credit institutions, and others, will have this obligation. In addition, local tax authorities and anti-fraud officials will have access to data collected and shared by the PSPs. However, its access will be strictly defined based on the data protection regulation.