Russia and Norway are ready to fight VAT fraud

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Russia and Norway are ready to fight VAT fraudThe European Commission (EC) has launched a process to start negotiations with Russia and Norway on administrative cooperation agreements to tackle VAT fraud. The aim of the agreements is to establish a framework of mutual assistance in combatting cross-border VAT fraud and in helping each country recover the VAT it is due. The sectors most fragile to VAT fraud are the telecoms and e-services due to the significant growth in recent years. Member states currently cooperate against VAT fraud by allowing each other access to their databases and exchanging information (either automatically or on request) on taxpayers’ activities. The EC is proposing to extend the use of instruments such as Eurofisc – an effective network for member states to exchange information and intelligence on VAT fraud – to neighboring countries and its main commercial partners. Both Norway and Russia have already confirmed that they are ready to start official negotiations. Cyprus also supports the initiative proposed by the European Commission. It should be noted the VAT rate in Cyprus increased once again from 18% to 19% in January 2014 while for example Singapore GST (analogue VAT in Europe) is only 7%.