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Central Electronic System of Payment information (CESOP)

​As from 1st January 2024, the provisions transposing Council Directive (EU) 2020/284, which amends the EU VAT Directive (CD 2006/112/EC), will come into effect. This new Directive introduces certain new reporting requirements for Payment Service Providers* concerning cross-border payments originating from EU Member States. This new requirement is increasingly relevant in view of the growth of electronic commerce which facilitates cross-border sales of goods and services to final consumers in an EU Member State (where the VAT may be due) in which the supplier is not established (thus not necessarily registered for VAT purposes).

Such information will feed into a centralised European database – the Central Electronic System of Payment Information (CESOP) where it will be stored, aggregated and cross-checked with other European databases. This new reporting requirement is detrimental to the fight against cross-border VAT fraud particularly in the area of e-commerce. It gives tax authorities the necessary tools to detect and control fraudulent businesses who seek to exploit e-commerce opportunities in order to gain unfair market advantages by evading their VAT obligations.

Whilst transposition into national legislation is still a work in progress, stakeholders or other interested parties may seek further information as regards the new requirements coming into play in 2024 on the EU Commission’s website as follows:

CESOP – EU Commission Website​​

It is also opportune to note that the EU Commission has already published reporting guidelines, as well as a technical user guide, available on the abovementioned link (at the bottom of the webpage).

In case of any queries as regards CESOP, you are kindly requested to contact the Office of the Commissioner for Revenue on cesop.cfr@gov.mt. 

*The Payment Service Providers within the scope of the reporting obligation are set out in Council Directive (EU) 2020/284, namely:

    •   credit institutions;
    •   electronic money institutions;
    •   post office giro institutions;
    •   payment institutions.

Such are defined in Article 1(1) of Directive (EU) 2015/2366 [PSD 2]. The reporting obligation also includes Payment Service Providers that process less than €3 million annually and which may be exempt from certain obligations in terms of ‘PSD 2’.