CESOP workshop: key highlights

The CESOP workshop explored the intricacies of the role of financial institutions in supporting tax authorities. Led by the ABBL, a specialist working group tackled the complexities emanating from the European CESOP Directive. Navigating between CESOP requirements and data protection rules, industry figures such as Serge Faber and Nelson Nogueira shared valuable insights, underlining the overriding objective of fostering a common understanding and balanced outcomes for payment service providers (PSPs).

Take a look back at the key points of this highly successful event, organised by the ABBL in collaboration with the Administration de l’enregistrement, des domaines et de la TVA (AED) and the Centre des Technologies de l’Information de l’Etat (CTIE).

Useful links:

• https://taxation-customs.ec.europa.eu/taxation-1/central-electronic-system-payment-information-cesop_en
• https://guichet.public.lu/en/entreprises/fiscalite/declaration/cesop/transmission-cesop-prestataires-services-paiement.html

1. The framework and related reporting requirements for PSPs

Serge Faber, Head of risk management and advanced analytics at the Luxembourg Indirect Tax Authority and head of the CESOP project, shared his comments and views on the framework and related reporting requirements for PSPs.

His explanations started with the background to the European Directive, which introduces certain requirements for payment service providers (PSPs), in particular the reporting of cross-border payment transactions to a European database: the Central Electronic System of Payment information (CESOP). The main objective of this new measure is to give tax authorities of the Member States the right instruments to detect possible e-commerce VAT fraud.

Following this, he described the Eurofisc network and how CESOP is part of it, and gave an overview of the legislation due to come into force on 1 January 2024.

2. Live demonstration of report transmission

Nelson Nogueira from the Government IT Centre then presented the tool developed for the AED to respond to the Directive reporting requirements and gave a live demonstration.

How to send quarterly reports to the AED?

First step – Identification of the PSP by certification of a “Business e-Space”.

Explanation and live demonstration of how PSPs must create the CESOP e-space in MyGuichet and obtain certification from the AED. This process can also be carried out by an authorised third party. One of the prerequisites is to have a strong customer authentication solution, i.e. Luxtrust or an EU e-IDAS compliant product. Another one is to have the PSP Luxembourg ID number.

Transmission of reports

Transmission is done via the MyGuichet CESOP procedure, where the report is sent as an XSD file in XML format, as required by European Commission guidelines. The rules for corrections and subsequent report transmission have been exposed.

The PSP receives one of the following responses: accepted/partially accepted/rejected.

Question and answer session

Serge Faber and Nelson Nogueira answered over 30 questions from PSPs and other payment and tax experts.

The questions covered the following topics:

• Scope and reporting obligation
• Location rule and use of identifiers
• Reporting technical questions
• Sanctions
• Calculation of thresholds and aggregation of transactions
• Data protection issues
• Review of certain use cases

Finally, Galina Miroshnichenko, Adviser Payments & Digital at the ABBL, provided a round-up and ensured the support and commitment of the ABBL to its members.