What is CESOP?

CESOP (Central Electronic System of Payment Information) is a central electronic system for collecting payment data aimed at preventing Value Added Tax (VAT) fraud in the online sale of goods and services. This system enables the tax authorities of EU countries to effectively track online sellers who sell goods or services in the EU and do not pay VAT.

 

How does CESOP work?

Payment service providers in the EU send payment data and information about payment recipients to the relevant tax authorities. These authorities then forward the data to the CESOP system at the EU level, where it is accessible to all tax authorities of EU countries. This allows tax authorities to more easily detect online sellers who do not pay VAT on sales of goods or services within their country.

Who are the payment service providers?

Payment service providers are:

• Credit institutions, such as banks
• Payment institutions
• Electronic money institutions
• Electronic wallet providers
• Electronic voucher/card providers
• Post-office giro institutions
• Marketplaces.

 

Which transactions need to be reported?

Payment service providers report only cross-border payments to a specific payment recipient if they receive at least 25 payments in a single calendar quarter.

 

Example 1: An electronic money institution based in Germany makes 35 payments to a Slovenian online seller from January to March. The payments are made from various EU countries.

Does the institution need to submit a CESOP report in Slovenia?

Yes, because the institution made more than 25 cross-border payments from various EU countries to a Slovenian online seller in the first calendar quarter.

 

Example 2: An electronic money institution based in the Netherlands provides payment services in several EU countries. In Germany, it made 7,800 payments to a Chinese online seller from April to June.

Does the institution need to submit a CESOP report in Germany?

Yes, because the institution made more than 25 cross-border payments from Germany to a Chinese online seller in the second calendar quarter.