The Council Directive 2010/24/EU, of 16 March 2010 is a Directive concerning mutual assistance for the recovery of claims relating to taxes, duties and other measures.97 This Directive is the extension of the Mutual Assistance Directive in the
93 Savings Directive, Art. 5
94 Savings Directive, Art. 6; see also Maarjana Helminen, EU Tax Law Direct Taxation, (2013) IBFD 95 Savings Directive, Art. 6 (1)(a)
96 Savings Directive, Art. 6 (1)(b,c)
97 Council Directive 2010/24/EU concerning mutual assistance for the recovery of claims relating to
30
recovery of tax claims.98 The arrangements for mutual assistance in European Union had been started since it was first set out in Council Directive 76/308/EEC of 15 March 1976 for the European Agricultural Guidance and Guarantee Fund and agricultural levies and customs duties, and it was amended by the Council Directive 2008/55/EC of 26 May 2008 on mutual assistance for the recovery of claims relating to certain levies, duties, and taxes and other measures, however this amendment have proved insufficient to meet the requirement of internal market, whereby a modification was needed, and the latter should be repealed by new instrument providing a clearer and precise rules.
The Objective of Recovery Directive
Given the increasing mobility in internal market, the Directive has the objective to ensure the fiscal neutrality when it allows Member States to remove discriminatory protective measures in responding the assistance requests in cross-border transactions designed to prevent fraud and budgetary loss in internal market or in other word, to better safeguard the financial interests of the Member States by providing more effective and efficient assistance in order to provide better result.99
4.5.2.1 Procedure
This Directive is expected to cover all forms of claims of the public authorities relating to taxes, duties, levies, refunds and intervention including all pecuniary claims and also to make sure that disparities in national laws and lack of coordination between contracting states will not jeopardize the operation of this Directive.100
“The requested authority may supply the applicant authority with the information which the latter needs in order to recover claims arising in the applicant Member State and notify to the debtor all documents relating to such claims emanating from the applicant Member State. The requested authority may also recover, at the request of the applicant authority, the claims arising in the applicant Member State, or take precautionary measures to guarantee the recovery of these claims.”101
This Directive requires the communication to be made in digital form to make the procedure easier and faster.102 In order to achieve the efficiency while handling the request of assistance from applicant authority, the requested authority can apply its power under its own national laws concerning the similar or the same taxes. However, if there are no similar or same taxes, it is then permissible to use the power provided under the requested authority’s national law on personal income.103
In giving assistance for the applicant authority, the requested authority shall notify the addressee regarding all documents related to the claim in Article 2 (Scope of Recovery Directive) and to its recovery.104 Regarding the request of the information,
98 Recovery of Collection Directive 99 Recovery of Collection Directive
100 Council Directive 2010/24/EU concerning mutual assistance for the recovery of claims relating to
taxes, duties and other measures (Recovery of Collection Directive).Para (5-6) Preamble
101 Recovery of Collection Directive, Para (7) Preamble 102 Recovery of Collection Directive, Para (11) Preamble 103 Recovery of Collection Directive, Para (14) Preamble 104 Recovery of Collection Directive, Art. 8
31
there are several ‘limitation’ where the requested authority is not obliged to provide information to the applicant authority if:
a. The information will not be able to obtain
b. The information will disclose commercial, industrial and professional secrets;
c. The information will detriment security or contrary to public policy of the requested Member State.105
Article 18 also covers the limitation of the requested authority’s obligations that includes the economic and social situation of its own national, time limit of the request, and threshold of the claims.
However, the requested authority will not be able to decline the request of the applicant authority on the base of the information is held by bank or financial institutions or related to ownerships interest in a person.106
In the execution of the request, Article 13 of the Directive stated that:
“For the purpose of the recovery in the requested Member State, any claim in respect of which a request for recovery has been made shall be treated as if it was a claim of the requested Member State, except where otherwise provided for in this Directive. The requested authority shall make use of the powers and procedures provided under the laws, regulations or administrative provisions of the requested Member State applying to claims concerning the same or, in the absence of the same, a similar tax or duty, (…)”107
The requested authority shall take precautionary measures in handling the request of the applicant authority as long as it is in accordance with its own national law.
4.5.2.2 The Cost
The requested authority shall seek to recover from the person concerned and retain the costs linked to the recovery that it incurred, in accordance with the laws and regulations of the requested Member State.108 Member States also required to renounce all claims on each other for the reimbursement of costs arising from any mutual assistance they grant each other pursuant to this Directive. However, when a specific problem arises, the applicant and requested authorities may agree on reimbursement arrangements.109
4.5.2.3 Language Requirements
Request for assistance, standard forms for notification, and uniform instruments permitting enforcement shall be accompanied by translation into the official language, or one of the official languages of the requested Member State. The differences in language shall not affect the validity.110
105 Recovery of Collection Directive, Art. 5 106 Recovery of Collection Directive, Art. 5 107 Recovery of Collection Directive, Art. 13 108 Recovery of Collection Directive, Art. 20 (1) 109 Recovery of Collection Directive, Art. 20 (2) 110 Recovery of Collection Directive, Art. 22 (1)
32
4.5.2.4 Intermediate Remarks
In contrast in the EU, there is no equivalent rules in Indonesia regulating recovery of tax claims. This means, tax that cannot be imposed in Indonesia will not be guaranteed to be recovered in other countries. The power possessed by Indonesian tax authority and the authority of other state who has tax cooperation in Indonesia is limited have also resulted in the loss of potential tax revenue.
The non – existence of Recovery of Collection rules in Indonesia brings uncertainty for the tax authority and most importantly for the state itself. Indonesia should consider to provide legal framework on this matter to ensure the needs to safeguard tax revenue in Indonesia. The urgency of having the rules that covers recovery of collection rules will be crucial once Indonesia is involved in cross-border transactions and when Indonesia establish a tax treaty with another country.