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Ensure your compliance with the expertise of CYPLOM
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The CESOP, or Central Electronic System of Payment Information, is a new European Union regulation, put in place in early 2024, to fight against VAT fraud. This directive requires PSPs to collect and transmit information on cross-border payments to ensure total transparency and optimal fiscal control within the EU.
The CESOP Directive requires Payment Service Providers (PSPs) to maintain an electronic register of cross-border payments, including beneficiaries and amounts. The data must be kept for three years and transmitted quarterly to the tax authorities via a standardized XML file.
PSPs operating in France or having branches in France must report all payment transactions made to beneficiaries who have received more than twenty-five cross-border payments per quarter. This obligation aims to increase transparency and to prevent VAT fraud.
The information must be submitted to the French tax authorities at the end of the month following the quarter in question. The reporting process involves careful formatting to ensure that the data meets the required technical specifications.
This measure aims to create a fairer competitive environment by eliminating the undue advantages obtained by businesses evading VAT, thus helping to secure tax revenues and supporting the European single market.
Specialized expertise
Our lawyers have been assisting numerous clients with similar reporting obligations since 2019 (242 bis, DAC7, DAC6,...).
Analysis of the field of data to be transmitted
We assist your teams with extractions. This crucial step makes it possible to identify the required information, verify its accuracy, and ensure that it meets regulatory requirements. Our methodical approach ensures that your business only addresses the data required by regulations.
Reliability and correction of data
We help you to make your data reliable and to correct their formats if necessary. By working closely with your team, we ensure that all data is accurate and meets the required standards. We use advanced validation techniques to detect and rectify any inconsistencies, thus guaranteeing the quality of the information transmitted.
Generating declarations in XML
We take care of the generation of your CESOP declarations in XML. Thanks to our technical expertise and our specialized tools, we produce XML files that comply with regulatory specifications. This includes the correct structuring of the data and the final verification before submission, thus ensuring a smooth and error-free transmission to the tax authorities.
Let's organize a meeting to talk about it!
The new CESOP modalities of 2024 relating to cross-border payments add a new battery of rules, controls, declarations, etc. to avoid VAT fraud.
Our law firm specializing in VAT in all its forms is the best choice to support PSPs in European regulations, install advance control and optimize internal procedures for payment providers.
To limit VAT fraud, at the beginning of 2024, the European Union just adopted new rules concerning the transmission and exchange of payment data: the CESOP or “Central Electronic System Of Payment Information”. Which can be translated as “central electronic payment information system”.
VAT fraud in the European Union has garnered a lot of attention in recent years with the proliferation of e-commerce. Ever-expanding digital transactions have made it easier for some businesses to avoid tax obligations. These frauds not only impact the tax revenues of the Member States, but also European companies themselves by distorting competition.
A genuine intra-Community VAT control policy
To control the mass of intra-European transactions, the Council of the Union adopted numerous directives and regulations as early as 2011. In 2020, the EU 2020/284 directive, known as CESOP: “Central Electronic System Of Payment Information”, subjects payment service providers or PSPs to real transparency on the payment of Value Added Tax (VAT).
PSPs must therefore keep track of transactions, the identity of payers and beneficiaries of payments in order to make them available to the tax authorities of the Member States, if necessary, through the Eurofisc network.
At the end of 2023, the member states of the European Union had to transcribe the directive into local law for entry into force in January 2024. In April 2024, the companies concerned had to transmit their tax data for the first time.
As already mentioned above, this directive and its obligations concern payment service providers (see definition of the European Parliament's PSD2 directive), payment institutions such as “traditional” but also credit banks, more specialized structures on electronic transactions and electronic money issuers and postal check offices.
In France, the reporting obligation concerns PSPs whose head office or central administration is located on the territory or who have a branch or an agent providing payment services.
PSPs must keep a record reporting information on beneficiaries receiving more than 25 payments per quarter.
The standardized XML file must obviously specify the identity of the intermediary, that of the beneficiary (name, company name, bank details), the amounts, dates and origins of payments, among others.
In addition to the obligation to report every quarter (at the latest by the end of the month following the calendar quarter), PSPs have a duty to keep this information for three years, starting with the calendar year of the transaction.
Once received by the Member States, the declarations are integrated into the European CESOP database for detailed analysis and made available to Eurofisc experts.
This European fiscal novelty has been implemented, particularly in France, over a very short period of time and some PSPs are having trouble optimizing the entire declaration process. It's time to call on experts like our two tax lawyers.
Our experts in VAT management in all its forms are of course a valuable aid within the framework of CESOP.
They will bring you:
• daily regulatory monitoring: our lawyers have chosen to focus solely on the management of VAT in all its forms. CESOP declarations are therefore part of their field of expertise. Their expertise in the field and their knowledge of the ins and outs of this tax innovation will be a major asset for your payment service provider company.
• A personalized solution from A to Z: each PSP has its own identity, whether in its way of operating, in its relationships with intra-European companies or in the payment services provided. From data collection to the preparation of XML declarations on the tax administration portal, we will be a valuable player in your compliance. In particular by optimizing the resources implemented, whether human or technical. We can also help you offer CESOP training for your company's employees in charge of transactions and VAT.
• Customized technical solutions: beyond the purely legal and regulatory aspect, our law firm is in a position to develop a tailor-made IT tool to lighten the upstream devices, structure and filter the essential data, and facilitate the management of XML declarations. But also install a real data protection policy, particularly in the preservation of CESOP declarations. You will have at your disposal the most advanced technological tools to facilitate and simplify the management of these declarations, which can without this mobilize a lot of human and financial resources.
Choosing the law firm CYPLOM means having more than experts at your side: real partners focused on your problems and developing operational solutions quickly and tailor-made. But also a rare availability in the VAT management sector.
If you are facing CESOP declaration problems or if you want to optimize their management, do not hesitate to contact us quickly for a conference call. In a few moments, you will see firsthand the importance of having a VAT expert.
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