Starting on 1 January 2024, the released new reporting requirement for Payment Service Providers (PSPs) among cross-border payments will be applied in the European Union. A cross-border transaction occurs when a payer is located within the EU while the payee is in another taxable jurisdiction (EU or NON-EU).
The Council Directive (EU) 2020/284 of the 18 February 2020 amending Directive 2006/112/EC outlines the basic VAT accounting requirements for taxable individuals. Hence, the bill orders the service providers to monitor the 25 cross-border payments per payee within the EU quarterly by using an electronic standard form.
The requirements aim to support efforts preventing VAT fraud. Thus, the records should include the following information:
- the BIC or any other company identification number that identifies the PSP;
- the payee’s name or company name as it appears in the PSP records;
- any VAT identification number or other national tax number belongs to the payee, if available;
- the IBAN or, in the absence of an IBAN, any other identification that identifies and specifies the payee’s location;
- the PSP’s records include the payee’s address if it is available;
- the actual and specific details of any cross-border payment;
- the details of any payment refunds associated with cross-border payees.
Disclaimer: Reproduced/Adapted with permission from Global VAT Compliance.