DATEV eG

January 2023 DATEV eG is the software company and IT services provider for tax consultants, auditors, lawyers as well as their clients. With over 8,000 employees, the company is one of the largest IT service providers in Germany and Europe. The cooperative’s range of products and services encompasses the fields of accounting, personnel management, taxes, enterprise resource planning (ERP), IT services, IT security, training and consultancy. Via our 40,000 members, the cooperative continuously improves the business processes of 2.5 million companies (most of them SMEs), municipalities and institutions. DATEV has consistently developed into an internationally operating service provider, with branches in Italy, Austria, Czech Republic, Poland, Slovakia, Hungary, and Spain.

…operating service provider, with branches in Italy, Austria, Czech Republic, Poland, Slovakia, Hungary, and Spain. DATEV ‘s position papers are drafted exclusively from the company’s perspective as a professional IT services provider and are submitted independently from positions established by professional organisations such as chambers and associations. EU Transparency Register number: 5027241291-41 Ref. Ares(2023)2222770 - 28/03/2023 DATEV Position Paper on VAT in the Digital Age – 01/2023 January 2023 2 DATEV welcomes the EU Commission's initiative to combat VAT fraud and to exploit the opportunities offered by digital technologies. As an IT cooperative of tax advisors, auditors and lawyers with the specific knowledge of 2.5 million small and medium-sized enterprises in Germany and locations in several Member States, DATEV has extensive expertise in digitalisation.

…enterprises in Germany and locations in several Member States, DATEV has extensive expertise in digitalisation. With our software solutions, we support tax declarations, among other things. Our experience and perspective of a European cooperative are the background to our following remarks. 1 Digital reporting obligations: EU plans in the context of national systems In many Member States, digital reporting systems to combat VAT fraud have been introduced in recent years or their introduction is planned. These systems range from reporting to split- payment to clearance models in various forms. They focus on combating national cases of VAT fraud and are effective, as i.e. known from Italy.

…in various forms. They focus on combating national cases of VAT fraud and are effective, as i.e. known from Italy. In view of the different approaches in the Member States, we welcome a European initiative, in particular that it focuses on combating fraud in cross-border cases and the interoperability of the different existing approaches. The proposal of the EU Commission provides for the convergence, in other words the complete alignment, of the national systems by 2028. While interoperability of the systems is to be welcomed, it seems too far-reaching to demand convergence for purely national cases and to generally deny the legitimacy of clearance systems as in Italy from 2028 onwards. The aim must be to strike a balance between the state's interest in securing state revenue on the one hand and the interest of business in efficient, unbureaucratic processes on the other.

…state revenue on the one hand and the interest of business in efficient, unbureaucratic processes on the other. Acceptance amongst businesses will largely depend on the efficiency of the workflows, compatibility with previous processes and whether investments already made are maintained. We welcome the approach of decentralising the system. By detaching the invoice transmission process from the reporting process, the established e-invoice processes of the economy can be maintained, and investments can be persevered to a large extend. In addition, in a decentralised system, the danger of a "single point of failure" for business-relevant processes can be reduced. For successful fraud prevention through EU reporting obligations of transactions subject to VAT, the key success factor will be the efficient matching of the relevant data and thus an agreement on a digital standard format.

…success factor will be the efficient matching of the relevant data and thus an agreement on a digital standard format. DATEV Position Paper on VAT in the Digital Age – 01/2023 January 2023 3 Structured electronic invoice as a basis We therefore welcome that the EU Commission's proposal is making the structured electronic invoice a cornerstone of the system and significantly strengthening it as the "default system". The general introduction of electronic invoicing will not only contribute significantly to the fight against VAT fraud, it holds numerous efficiency advantages and can make an important contribution to the digitalisation of the economy. The definition of an invoice in a structured electronic format contributes to legal certainty.

…of the economy. The definition of an invoice in a structured electronic format contributes to legal certainty. With the CEN standard EN 16931, a technical standard for electronic invoicing has already been created and implemented in large parts of the economy and administration in accordance with the requirements of EU Directive 2014/55. We are pleased to see that this European standard also forms the basis for the collection and reporting of data on VAT transactions. In its proposal, the EU Commission provides that the Member States can allow other interoperable formats in addition to the EU formats. This is an important prerequisite so that national formats based on the European standard, such as ZUGFeRD and XRechnung, which are well established in Germany, can continue to be used.

…the European standard, such as ZUGFeRD and XRechnung, which are well established in Germany, can continue to be used. Reporting obligations: Deadlines and scope The EU Commission's approach of setting binding EU requirements for reporting obligations in the trade of goods and services to combat VAT fraud is an important and appropriate step. In principle, however, the scope of the reporting obligations does not seem necessary for combating VAT fraud and is therefore not compatible with the principle of data minimisation. To combat fraud, it is sufficient to report part of the information contained in an electronic invoice. The information needed is much more limited than envisaged in the EU Commission's proposal.

…in an electronic invoice. The information needed is much more limited than envisaged in the EU Commission's proposal. Thus, for tax purposes in EU trade in goods B2B, the transmission of data on invoice number, contracting parties (VAT ID), reason for tax exemption and total amount is sufficient. With mentioned data, invoices can be verified as tax-exempt intra-Community supplies of goods by means of the envisaged double reporting requirement of the supplier and the recipient of the transaction, thus counteracting the currently existing fraud practices, e.g. carousel transactions in the international trade of goods. - In particular, the inclusion and reporting of an account to which the payment is credited raises concerns.

…of goods. - In particular, the inclusion and reporting of an account to which the payment is credited raises concerns. In practice, account details are regularly stored in the systems of the invoice recipient and thus provide security against fraudulent invoices that could mislead the recipient to transfer to a falsely indicated account of a fraudulent invoice issuer. An obligation to use an account to be stated in the invoice would run counter to this security against fraud or error. DATEV Position Paper on VAT in the Digital Age – 01/2023 January 2023 4 - Also, the reporting of the type and quantity of the delivered items or the scope and type of the service rendered seems to us not to be necessary. A prerequisite for comparability would be the standardisation of item descriptions. On the one hand, practice shows that the nomenclatures differ considerably and lack comparability.

…item descriptions. On the one hand, practice shows that the nomenclatures differ considerably and lack comparability. On the other hand, and this is decisive in the context of combating VAT fraud, the detection of invoice contents that may deviate from the actual delivery of goods is not to be expected, since the information on the outgoing and incoming invoice will be identical and - if there is an intention to defraud - mutually incorrect. Finally, in order to protect data security and trade secrets, a collection of all transaction contents at a central location would be inappropriate. With the proposal, the EU Commission intends to introduce a two-day deadline for both issuing the invoice by the service provider and for transmitting (incoming and outgoing). - The two-day deadlines for issuing and transmitting invoices appear to be inappropriately short.

…and outgoing). - The two-day deadlines for issuing and transmitting invoices appear to be inappropriately short. This applies in particular if no high-performance systems support the automatisation. This will particularly impose additional bureaucracy on SMEs and micro-enterprises and will pose difficulties in dealing with holidays and special situations such as illness. Concerns about the scope and the two-day deadline for reporting also exist as far as the obligation of the invoice recipient is concerned: - According to the EU proposal, the reporting data set should also contain the VAT rate and amount. In tax-exempt intra-Community trade in goods, an invoice recipient only collects this data in the course of taxing the purchase. Consequently, it cannot be included in the invoice issuer's outgoing invoice, since from his point of view it is a tax- exempt outgoing transaction.

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Position Paper on the GDPR Review January 2024 DATEV eG is the software company and IT services provider for tax consultants, auditors, lawyers as well as their clients. With over 8,000 employees, the company is one of the largest IT service providers in Germany and Europe. The cooperative’s range of products and services encompasses the fields of accounting, personnel management, taxes, enterprise resource planning (ERP), IT services, IT security, training and consultancy. Via our 40,000 members, the cooperative continuously improves the business processes of 2.5 million companies (most of them SMEs), municipalities and institutions. DATEV has consistently developed into an internationally operating service provider, with branches in Italy, Austria, Czech Republic, Poland, Slovakia, Hungary, and Spain.

…operating service provider, with branches in Italy, Austria, Czech Republic, Poland, Slovakia, Hungary, and Spain. DATEV ‘s position papers are drafted exclusively from the company’s perspective as a professional IT services provider and are submitted independently from positions established by professional organisations such as chambers and associations. EU Transparency Register number: 5027241291-41 Ref. Ares(2024)685419 - 30/01/2024 DATEV Position Paper on the GDPR Review January 2024 2 DATEV welcomes the opportunity to provide feedback on the application of the GDPR. DATEV sees a need for improvement in the following four areas in particular. Clarifying Definitions and Terminology Further clarification is needed regarding the definition of personal data under Art. 4 GDPR. It needs to be specified under which conditions datasets containing personal data are considered as anonymous.

…4 GDPR. It needs to be specified under which conditions datasets containing personal data are considered as anonymous. Moreover, it remains unclear to what extent anonymous data, which can potentially be supplemented with information when passed on to third parties and thereby allowing clear personal references to be made, can be considered anonymous. Therefore, we endorse the German proposal to reduce uncertainties regarding the pseudonymisation and anonymisation of data, which was put forward in the preparation of the Council position on the evaluation and review of the General Data Protection Regulation (GDPR).1 Information Fatigue The information obligations under Art. 13 and 14 GDPR have led to an overload of information, which is neither requested nor acknowledged by the data subject.

…13 and 14 GDPR have led to an overload of information, which is neither requested nor acknowledged by the data subject. Particularly the very long and mostly confusing information in the form of data protection declarations do not lead to transparency for the data subject, as intended by the GDPR, but at best serves to fulfil a legal obligation on the part of the controller. Apart from additional guidance on the interpretation of the information obligations, it is necessary to clarify what information should be made available immediately to the data subject and whether additional information could be made available elsewhere. Consideration should also be given to clustering information relevant to data protection in order to prevent information fatigue. This can be achieved with the the implementation of standardised symbols as proposed in Art.

…information fatigue. This can be achieved with the the implementation of standardised symbols as proposed in Art. 12 (8), which the EU-Commission has yet to put forward. Making the GDPR more SME-friendly Furthermore, SMEs in particular have difficulties to fulfil the far-reaching documentation requirements under the GDPR. We therefore support a differentiation of the documentation obligations in order to reduce the burden for SMEs. Concerning the documentation requirements, we recommend focusing more on the risk that the processing might cause to data subjects. This would be in line with the risk-based approach of the GDPR. Data Breaches As emphasized by Germany in the preparation of the Council position on the evaluation and review of the GDPR, companies face great uncertainties with regard to reporting personal data breaches.

…evaluation and review of the GDPR, companies face great uncertainties with regard to reporting personal data breaches. In particular, it remains unclear whether any further misconduct uncovered as part of the data breach notification can be used in the course of a subsequent investigation by the 1 Council of the EU (09.10.2019), Preparation of the Council position on the evaluation and review of the General Data Protection Regulation, Note 11292/19 (https://data.consilium.europa.eu/doc/document/ST-12756- 2019-REV-1/en/pdf). DATEV Position Paper on the GDPR Review January 2024 3 supervisory authority. While the German legislator recognized the conflict between the reporting obligation under the GDPR and the freedom of self-incrimination and therefore adopted a comprehensive prohibition of use, this point remains unclear on European level.

…and therefore adopted a comprehensive prohibition of use, this point remains unclear on European level. It is therefore necessary to state clearly that such information must not be used for subsequent investigations. Contact Johannes Holtz Senior Policy Advisor E-Mail: [email protected]

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