Commission modernises EU customs procedures

The European Commission has adopted today a legal act to create a simpler, more modern and integrated EU customs system to support cross-border trade and provide for more EU-wide cooperation in customs matters.

It builds on the Union Customs Code adopted in 2013, which sets out detailed rules for twenty-first century customs processes. Customs services play a central role in policing the EU’s external borders and in facilitating trade.

The customs union is the operational arm of much of the EU's commercial policy measures. In addition, a growing range of government agencies call on customs to enforce their policies at the border.

EU customs handle 16% of world trade, or over two billion tonnes of goods a year with a value of EUR 3,400 billion. Pierre Moscovici, EU Commissioner for Economic and Financial Affairs, Taxation and Customs, said:

 “A modern and cost-effective customs system facilitates international trade and is conducive to growth. It also plays a vital role in defending the safety and security of European citizens and in protecting Member States' interests.” 

The Commission has been working for several years on a major overhaul of customs rules in the EU. The basic regulations were changed in 2013.

Detailed acts must subsequently be adopted so that the new rules can be applied as of 1 May 2016.

Today's decision takes the form of a delegated act. This kind of legal act, introduced by the Treaty of Lisbon in 2010, gives the Commission power to adopt the technical, non-essential elements of an existing legislation, in this case of the Union Customs Code.

The act adopted today covers a wide area of customs activity, including:

• Simplifications of the customs procedure inward processing which allows the processing of non-Union goods without payment of import duty and other charges to support creation of added value in the EU;
• Clearer rules to ensure equal treatment of economic operators in the EU;
• Wide-ranging provisions which will allow customs decisions and authorisations to be valid across the EU in the future;
• Establishing common data requirements as the basis for new IT systems linking Member States' customs administrations to ensure a seamless exchange of information;
• Improvements in risk management to reinforce the fight against trade in illicit and prohibited goods, terrorism and other criminal activities.

The delegated act will now be considered by the European Parliament and the Council. In accordance with Article 290 TFEU, both can raise their objections within two months. This period of scrutiny can be extended by a further two months.

Background

The EU customs union has provided a stable foundation for economic integration and growth in Europe for over four decades.Customs legislation is decided at EU level while the implementation of that legislation falls primarily on the Member States.

Efficient customs administrations are essential to ensure a level playing field for traders in different Member States and to police the EU’s external borders.

In 2012, the Commission outlined a course of action for a more robust and unified customs union by 2020 in its Communication on the State of the Customs Union.

The Communication provided for a reform of its legal framework as well as a vast shift towards digitisation.

The Union Customs Code (UCC) which came into force in 2013 enables customs to focus more on trade facilitation as well as on security, safety and the enforcement of intellectual property rights. It also improves cooperation between customs authorities and other services.

Today's delegated act builds on this by setting out the details of the rules which will apply as from 1 May 2016. It will be supplemented by an additional implementing act, which is being submitted to Member States at the same time and will set out procedural details.

The implementing act will be voted by the Customs Code Committee composed of representatives from Member States.

The Commission consulted extensively with Member States and trade interest groups to prepare the delegated act. The act was adopted well ahead of the 1 May 2016 deadline to allow stakeholders to adapt.

For more information Video: One minute in the life of the EU Customs Union

Source: European Commission - PRESS RELEASES - Press release - Commission modernises EU customs procedures

The Australian Tax Office (ATO) Practice Statement

Tax benefits/avoidance & GAAR

Australia's effort to change the international tax arena. This practice statement is a draft for consultation purposes only.  Interested parties should submit comments by 25 September.

When the final practice statement issues, it will have the following preamble: This practice statement is an internal ATO document, and is an instruction to ATO staff.

Taxpayers can rely on this practice statement to provide them with protection from interest and penalties in the following way.

If a statement turns out to be incorrect and taxpayers underpay their tax as a result, they will not have to pay a penalty. Nor will they have to pay interest on the underpayment provided they reasonably relied on this practice statement in good faith.

However, even if they don't have to pay a penalty or interest, taxpayers will have to pay the correct amount of tax provided the time limits under the law allow it.

This practice statement is designed to assist Tax officers who are contemplating the application of Part IVA or other GAARs to an arrangement, including in a private ruling, Public Ruling (including a Product Ruling or a Class Ruling) or other document setting out the ATO view.

• Trends
• Audit Defense

Webcasts about Indirect Tax Function Effectiveness

Benchmark information, templates, modules and approaches are shared to support VAT process improvements and meet business objectives

The added value of benchmarking the VAT function against best practices in the market is to gain objective evidence to what has already been achieved but also what still needs to be done to get there.

Our 'free' community Global Indirect Tax Management (GITM) website shares benchmark information about the effective management of VAT. It shows the area where risk based controls are to be expected and in addition shares templates and methods for self assessments purposes.

'Why', 'What', and 'How' of Managing an Effective Indirect Tax function

The global tax environment is in a state of fast change. A shift to indirect taxes represents the global trend. Driving Indirect Tax Management therefore becomes more and more important. The key to success in the management is the ability to translate indirect tax knowledge into a workable business process.

In general the advisory sector may bring you a wealth of knowledge but in practice the translation gap to a process within the actual execution of the theory makes a business vulnerable for an endless increase in consulting cost and an ineffective approach in timely dealing with current indirect tax exposures. This may easily result in a financial disaster.

Tax authorities are continuing to pick up on the common weaknesses identified in the Indirect Tax function. The restyling of the indirect tax function in a business may have to be considered by a business in order to deal with the increasing number of indirect tax challenges or to benefit from indirect tax opportunities.

Enhance the indirect tax communication within the business functional hierarchy, increase business awareness of the current state of its indirect tax function and set the right priorities for in-house stakeholders/departments (AP, AR, Legal, Finance etc) to successfully move to a best-practice is our philosophy.

Our aim is to share our expertise with you through this website, to create and share current state benchmarking knowledge, to inspire and also challenge your department functions through offering modules that can be used to scope process gaps from an indirect tax perspective.

A mythological way to express our mission statement would be to compare the general Indirect Tax function with the fall or rise of the Phenix legend. 

Reinventing Performance Management

The current way of performance review apparently says more about the reviewer than the reviewed and takes a lot of time - 2 million hours annually at Deloitte (completing the forms, holding the meetings, and creating the ratings):

Objective as I may try to be in evaluating you on, say, strategic thinking, it turns out that how much strategic thinking I do, or how valuable I think strategic thinking is, or how tough a rater I am significantly affects my assessment of your strategic thinking.

It was time for Deloitte to redesign its performance management, realize process improvement and a better outcome. The simpler design for managing people’s performance brought it back to four  questions:

• Given what I know of this person’s performance, and if it were my money, I would award this person the highest possible compensation increase and bonus \[measures overall performance and unique value to the organization on a five-point scale from “strongly agree” to “strongly disagree”].
• Given what I know of this person’s performance, I would always want him or her on my team \[measures ability to work well with others on the same five-point scale].
• This person is at risk for low performance \[identifies problems that might harm the customer or the team on a yes-or-no basis].
• This person is ready for promotion today \[measures potential on a yes-or-no basis] From 

We ask leaders what they’d do with their team members, not what they think of them

Harvard Business Reviews

The above could also be used to measure the performance of the tax function and evaluate whether the right skill set from a teaming perspective is available on the long run:

• 'Structure the tax function'
• 'Pitfalls Of Actual To Budget Exercises Especially In The Downturn'