Exploring CESOP: New regulatory reporting obligation from EU

In the ever-evolving landscape of the digital economy, the European Union is introducing the newest regulatory obligation known as CESOP (Central Electronic System of Payment Information) effective from the 1st of January 2024. This initiative is designed to combat VAT fraud, particularly in the e-commerce sector, by imposing new reporting obligations on Payment Service Providers (PSPs).

CESOP: A Synopsis

CESOP mandates PSPs within the EU to maintain electronic records of payment data for cross-border payments and exchange these records with a newly established central EU database. This obligation is part of a broader framework aimed at monitoring VAT obligations and ensuring accurate identification of economic activity across member states.

Who is Affected?

The scope of CESOP is extensive, encompassing a variety of entities such as credit institutions, e-money institutions, payment institutions, and post-office giro institutions operating within the EU, as defined in the Payment Services Directive (Directive (EU) 2015/2366, “PSD2”).

Reporting Obligations and Compliance

PSPs are required to report specific transactional data quarterly, including payer and payee information, transaction details, and refund information. The reporting process is expected to be automated, with submissions in a standardized XML format. Non-compliance or infringements may attract fines of up to 5,000 euros.

Reporting Periods

  • 1st period (January – March): 30 April

  • 2nd period (April – June): 31 July

  • 3rd period (July – September): 31 October

  • 4th period (October – December): 31 January

Data is required to be submitted to CESOP by the 10th day of the second month after the conclusion of the reporting period.

Koios Consulting: Your CESOP Navigator

As one of the regional leaders in regulatory reporting, Koios Consulting is at the forefront in offering CESOP regulatory reporting services. We are committed to ensuring that our clients navigate through the complexities of CESOP compliance seamlessly, minimizing risks and maintaining a competitive edge in the evolving European e-commerce landscape.

In our pursuit to deliver excellence, we leverage the capabilities of SIBS to meticulously arrange and refine the data. This centralized reporting banking system allows us to optimize the accuracy and compliance of the reports, ensuring they meet the stringent standards set by CESOP regulations.

Post-processing through SIBS, we send the edited and optimized reports back to our clients, enabling them to have accurate and compliant data at their fingertips.

The Future of E-commerce VAT Compliance

The introduction of CESOP signifies a monumental stride in the fight against VAT fraud in the EU e-commerce sector. It promotes a fairer e-commerce market by monitoring and verifying the VAT registration of sellers and ensuring appropriate tax declaration in the respective member states.

Bottom Line

Koios Consulting is dedicated to guiding our clients through the intricate web of CESOP regulations, ensuring transparency, compliance, and efficiency in regulatory reporting. By leveraging our expertise, businesses can adapt to the new regulations and continue to thrive in the European e-commerce landscape.