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Questions and Answers – CESOP Page 1 / 31
Document version dated 27/07/2023
EUROPEAN COMMISSION
DIRECTORATE-GENERAL
TAXATION AND CUSTOMS UNION
Questions and Answers
Central Electronic System of Payment Information
(CESOP)
Date: 09/10/2023
Version: 2
Author: TAXUD C4, B4, CESOP Expert Team,
Expert Group
Approved by: DG TAXUD
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Contents
INTRODUCTION ......................................................................................................................................... 6
1.1 Document purpose ............................................................................................................................... 6
1.2 Abbreviations & acronyms .................................................................................................................. 6
2 GENERAL QUESTIONS ................................................................................................................. 7
2.1 The entities in scope ............................................................................................................................ 7
Are PSPs in the Member States identified by the tax administration or by PSPs associations? .......... 7
2.1.1 Territorial scope ....................................................................................................................... 7
2.1.1.1 Do the general obligations of PSPs pursuant to Section 2a of Chapter 4 of Title XI of the VAT
Directive apply to PSPs in third territories or third countries? ........................................... 7
2.1.1.2 Will Northern Ireland be treated as part of the EU for reporting requirements? ................ 8
2.1.1.3 Will payments made to/from United Kingdom Sovereign Base Areas of Akrotiri and Dhekelia,
and Monaco need to be reported in CESOP? ..................................................................... 9
2.1.1.4 Should payment transactions be reported by the payer’s PSP if the payee’s PSP is in an EEA
country? .............................................................................................................................. 9
2.2 Payments and PSPs in scope ............................................................................................................. 10
2.2.1 Do only e-commerce transactions need to be reported or also payments at the physical premises
of the merchant (POS)? .................................................................................................... 10
2.2.2 Are payments in cryptocurrencies under the scope of the reporting obligation pursuant to Article
243b of the VAT Directive? ............................................................................................. 10
2.2.3 Do payments made to escrow account, mortgage accounts, or accounts connected to credit cards
fall under the reporting obligation? .................................................................................. 10
2.2.4 Are MT202 transactions in scope of the VAT Directive? ................................................ 11
2.2.5 Do cross-border payments need to be reported when the payer and the payee are the same person
holding different payment accounts? ................................................................................ 11
2.2.6 Are intra-group payments in the scope of the reporting obligation? ................................ 11
2.2.7 Are payments from/to non -taxable persons (e.g. non-profit institutions, individuals, etc.) also
included in the scope of the reporting obligation? ............................................................ 11
2.2.8. Are winnings made from betting according to Directive 2020/284 payment refunds of the initial
wager? .............................................................................................................................. 11
2.2.9. Is a payment intermediary that collects cross -border payments from different payers (using
different payment’s methods e.g. cards, credit transfers, e -wallet etc…) and then transfers those
payments to the payees is to be considered as a PSP that has CESOP reporting obligations?
11
2.3 Card Payments ................................................................................................................................... 12
2.3.1 Do chargebacks to cardholders need to be considered for the reporting? ......................... 12
2.3.2 Who is responsible for the reporting of data in a 3 - party card scheme? ......................... 12
2.3.3 How should location rules apply in card payments? ........................................................ 13
2.4 ELECTRONIC MONEY .................................................................................................................. 14
Does a PSP which is an e -wallet provider and allows e -money transfers betw een payers and payees in
different countries potentially have CESOP reporting obligations? ................................. 14
3. MONITORING AND TRIGGERING OF THE REPORTING OBLIGATION ....................... 16
Is there a minimum materiality monetary amount for triggering the reporting obligation? .............. 16
3.1 Cross-border payments - Location rules of article 243c .................................................................... 16
3.1.1 Do payments between payers located in any Member State and payees located in any other
Member State (intra-EU payments) trigger the reporting obligation? .............................. 16
3.1.2 What is the overriding indicator between the IBAN, the BIC and other identifiers to determine
the location of the payee/payer when the different identifiers might lead to different location? e.g.
an account in an EU bank of a non-EU person? ............................................................... 16
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3.1.3 If both the payer and the payee are located outside the EU, is there still a reporting ob ligation of
the PSP? ............................................................................................................................ 17
3.2. THRESHOLD OF MORE THAN 25 CROSS-BORDER PAYMENTS UNDER ARTICLE 243b (2)18
3.2.1 When the threshold is reached, does each single payment need to be reported, or just the ones
above the threshold? ......................................................................................................... 18
3.2.2 Do PSPs need to aggregate every kind of payment in scope of the legislation (transfers, cards etc.)
for the same payee to calculate the threshold? ................................................................. 18
3.2.3 Which data elements should be used by payers’ PSPs to aggregate payment information referring
to the same payee? ............................................................................................................ 18
3.2.4 Is it true that the aggregation of payment accounts in application of Article 243b (2) VAT
Directive should only be performed in relation to the calculation of the threshold, but the data of
different payment accounts should never be aggregated? ................................................ 19
3.2.5 What are the principles for counting payments and calculate the thresholds when a PSP operates
cross-border, having both branches and subsidiaries? ...................................................... 20
3.2.6 Where the payee has branches in several countries, and each branch has a separate payment
account, do these branches need to be considered as separate payees (with their respective
location) or as one payee together with the head office (and one location, i.e., of the head office)
for the aggregation rule? ................................................................................................... 20
3.2.7 Are refunds included in the calculation of the thresholds? ............................................... 20
3.2.8 When the payer’ PSP is reporting, should the PSP determine the 25 transactions threshold based
on number of payments made by one payer only? ........................................................... 21
3.2.9 When the payer’ PSP is reporting, should that PSP include payments to payees located in the EU
in the calculation of the 25 transactions threshold? .......................................................... 21
3.2.10 Payments from a payer located outside the EU should not be reported to CESOP. Does this mean
that they should not even be included in the calculation of the 25 transactions threshold?21
3.2.11 Should part payments have to be calculated as one single transaction or separate transactions?
21
4. REPORTING ................................................................................................................................... 22
4.1 A Payer’s PSP will not have to report intra -EU payment transactions because they are reported
by the payee PSP. Does the payer’s PSP have to keep the records of these transaction for the three
years period? ..................................................................................................................... 22
4.2 Payments from payers located outside the EU do not have to be reported. Does the payee PSP have
to record these transactions? ............................................................................................. 22
4.3 If there are no transactions to be reported, what (level of) documentation should a PSP have
available in its files to evidence this? ............................................................................... 22
4.4 Data protection principle: is the transmission of data below the threshold in line with personal
data protection? ................................................................................................................ 22
4.5 What if a PSP reports on a payee less than 25 payments? Will CESOP reject this report?22
4.6 How often shall the data be reported? .............................................................................. 22
4.7 Will there be cases in which more than one PSP may be obliged to report? How can double
reporting be avoided? ....................................................................................................... 23
4.8 Are branches obliged to report on their own the payment data to the tax authority of the respective
host Member State? .......................................................................................................... 23
4.9 Are branches obliged to report on their own the payment data to the tax authority of the respective
host Member State even when they have no physical presence in the host Member State?23
4.10 PSPs with a branch/subsidiary in another MS: how should the data be subm itted by the
headquarter or by the branch/subsidiary? ......................................................................... 24
4.11 Can a group arrange to have all information on the payee addressed to one (preferred) Member
State? ................................................................................................................................ 25
4.12 Will there be a One-Stop-Shop solution for streamlined reporting? ................................ 25
4.13 When the requirements for the reporting obligation laid down in Article 243b of the VAT
Directive apply, if in a paymen t transaction a PSP is acting on behalf of both the payer and the
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payee, is it correct to state that the PSP only needs to report the payment transactions once?
25
4.14 Similarly to 4.13, when a PSP has different roles in one and the same payment transaction, is it
correct to state that the PSP only needs to report the payment transaction once? ............ 25
4.15 What is the payment amount to be reported for CESOP? Is this the amount paid by the payer or
the amount actually received by the payee? ..................................................................... 25
4.16 Should payment transactions be reported by the payer’s PSP if the payee’s PSP is in an EEA
country? ............................................................................................................................ 26
4.17 Should refunds be reported? ................................................................................................. 26
4.18 Should rejected payments be reported? ............................................................................... 27
4.19 Should a refund be reported if the original payment was not reported? ........................... 27
5. DATA ELEMENTS ....................................................................................................................... 28
5.1 Can the payment transactions to be reported be broken down according to the type of transaction
(cards/credit transfers/direct debits/instant payment)? ..................................................... 28
5.2 No information about the payer should be reported, except that relating to his/her state of origin.
In this regard, should records be kept with more details about the payer if needed for
investigation? .................................................................................................................... 28
5.3 Is the “accounting date” or the “value date” relevant for the purpose of detecting the transactions
to be reported? .................................................................................................................. 28
5.4. Which information has to be kept in the records of the PSPs, according to Art. 243d (2) point d
(“any reference which unambiguously identifies the payment “)? Would the payment reference
given by the payer fall under this point? .......................................................................... 28
5.5 Is it mandatory for a PSP to submit a nil reporting to the CESOP information system? .. 28
5.6 For a card issuer in a Member State with several cardholders located in a Member State that send
payments to payees located in several Member States: is there a need to produce several sets of
data? ................................................................................................................................. 29
5.7 Do PSPs have to send separate files depending on whether they act as payee’s PSP or as payer’s
PSP? ................................................................................................................................. 29
5.8 Is it necessary to report the payee’s address received on the transaction to be reported or the
payee’s address stored in the bank records? ..................................................................... 29
5.9 If a PSP needs to make corrections to the file and, in the meantime, there are changes in the name
of the payee, is it supposed to report the name as it was originally, or as it is now, or does it not
matter at all? ..................................................................................................................... 29
6. TECHNICAL QUESTIONS ........................................................................................................... 30
6.1 Regarding the XSD and XSD User Guide versions, in case of any changes, how these will be
communicated and be put into action at EU and MS level? ............................................. 30
6.2 Regarding the MessageRefId defined by the PSPs, is there a standard to be followed to guarantee
uniqueness of the ID, time and space? Where can I find more information on the MessageRefId?
30
6.3 What happens in the case that within a reporting period, there is no data for the PSP to report?
For instance, when PSPs do not have any payments under the VAT Directive 2020/284 in a given
quarter or the thresholds are not exceeded in a given quarter? Will nil reporting be implemented
in the XSD file, or will there be a simpler option available? ............................................ 30
6.4 As for the type of reporting data: are special characters, negative values and national characters
accepted by CESOP? ........................................................................................................ 30
6.5 How the PSP knows that the report submitted is correct? Is there any validation on behalf of MS
or CESOP? ....................................................................................................................... 30
6.6 Are there some minimum quality reporting standards used by CESOP in case a PSP has not
information like TIN, VAT number, Address, etc? .......................................................... 30
6.7 For transactions in third countries, the identifier of the payee may be different from IBAN. Will
the XSD tracking allow non-IBAN values to be captured? .............................................. 31
6.8 Is CESOP going to adopt ISO 20022 standard for more structured reporting? ................ 31
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6.9 How are the main CESOP system IT and the individual MS IT teams connecting to ensure
successful submissions? ................................................................................................... 31
6.10 Can a PSPs send several files (also below the theoretical maximum size of 1GB) for the same
reporting period? .............................................................................................................. 31
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INTRODUCTION
This document has been drafted based on the questions that DG TAXUD received by Payment Service Providers
and Member States authorities. DG TAXUD grouped the questions per topic, and the answers have been drafted
in cooperation with the CESOP Expert Group, composed of representatives from the Member States’ authorities
and Payment Service Providers.
1.1 DOCUMENT PURPOSE
The purpose of this document is to complement the CESOP Guidel ines with a number of Frequently Asked
Questions related to CESOP (Central Electronic System of Payment Information). It provides practical
information and explanations on the reporting of payment data by payment service providers and on their
collection by Member States. They do not have legal value and only serve to explain the legal obligation without
going against it.
1.2 ABBREVIATIONS & ACRONYMS
For a better understanding of the present document, the following table provides a list of the principal
abbreviations and acronyms used.
Abbreviation/Acronym Definition
BIC Bank Identifier Code
CESOP Central Electronic System of Payment Information
DG TAXUD Directorate-General for Taxation and Customs Union
IBAN International Bank Account Number
PSP Payment Service Provider
TIN Taxpayer Identification Number
VAT Directive Directive 2006/112/EC EUR-Lex - 32006L0112 - EN - EUR-
Lex (europa.eu)
Table 1: Abbreviations and acronyms
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2 GENERAL QUESTIONS
This list of answers and questions is based on the “Guidelines for the reporting of payment data from payment
service providers and transmission to the Central Electronic System of Payment information (CESOP)”
https://taxation-customs.ec.europa.eu/system/files/2022-10/CESOP-%20Guidelines%20for%20reporting.pdf
2.1 THE ENTITIES IN SCOPE
Are PSPs in the Member States identified by the tax administration or by PSPs associations?
Lists of PSPs that provide for payment services in the Member States are available to, updated and managed by
the national competent authorities which are either National Banks or National Supervisory Authorities. National
Tax authorities will gather the lists at national level.
2.1.1 Territorial scope
2.1.1.1 Do the general obligations of PSPs pursuant to Section 2a of Chapter 4 of Title XI of the
VAT Directive apply to PSPs in third territories or third countries?
The obligations laid down in Section 2a of Chapter 4 of Title XI of the VAT Directive apply to the PSPs that
provide for payment services in the Member States as defined in Article 5 of the VAT Directive. Namely each
Member State to which the Treaty establishing the European Community is applicable, with the exception of any
territory referred to in Article 6 of the VAT Directive.
Pursuant to Article 6 of the VAT Directive, the VAT Directive does not apply to the following third territories
forming part of the customs territory of the Community:
(a) Mount Athos;
(b) the Canary Islands;
(c) the French territories referred to in Article 349 and Article 355(1) of the Treaty on the Functioning of
the European Union (Guadeloupe, French Guiana, Martinique, Mayotte, Réunion, Saint-Martin);
(d) the Åland Islands;
(e) the Channel Islands ;
(f) Campione d'Italia;
(g) the Italian waters of Lake Lugano.
Furthermore, the Directive does not apply to the following territories not forming part of the customs territory of
the Community:
(a) the Island of Heligoland;
(b) the territory of Büsingen;
(c) Ceuta;
(d) Melilla;
(e) Livigno.
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The French Overseas Territories, the Netherlands Antilles, Faroe Islands and Greenland are treated as third
countries and VAT rules do not apply to them either.
Therefore:
payments from payers located in the third territories mentioned above (listed in Article 6 of the VAT
Directive), are outside the scope of the reporting obligation.
payments from a payer in a third territory to a payee in its mainland would not fall under the reporting
obligation because this is to be considered as a domestic payment. The same applies for payments from
a payer in a Member State (mainland) to a payee in a third territory of that Member State,
payments to payees located in whatsoever third territories mentioned above, from payers located in
whatever Member State (different than the third territories’ mainland), are in the scope of the reporting
obligation. These payments must be reported by the payer’s PSP.
In order for the payer’s PSP to determine the location of the payee’s PSP it is recommended to take into account
the payee’s account number such as the International Bank Identification Number (IBAN) or the Business
Identifier Code BIC of the payee’s PSP, which is based on the international standard ISO 9362. However, the
location of a branch in a third territory of a Member State might be difficult based on IBAN and BIC. Only in
some cases, an 11 characters BIC might include an element that identifies the specific location of a branch. Still,
sometimes even the 11 characters BIC does not give the indication of the third territories that falls in the exception
under Article 6 of the VAT Directive.
Even in such a case, it is still recommended that the payer’s PSP will take into account the IBAN of the payee
and/or the BIC of the payee’s PSP to determine the location of the payee’s PSP. In case those two indicators will
not allow the localisation in a thi rd territory, the payments have to be considered to the mainland. Therefore,
neither the payer’s PSP nor the payee’s PSP will report those payments. In fact, the payer’s PSP will consider the
payee’s PSP as established in another Member State and thus wil l not report that payments. On the other hand,
the payee’s PSP or the payee account are actually in one of the third territories listed in Article 6 of the VAT
directive, and thus outside the territorial scope of the reporting obligation.
Other information that might identify the exact location of a PSP or its branch might be misleading (e.g. the
address might be not updated). Therefore, in case of doubts on the best way to determine the location of the
payee’s PSPs, the payers’ PSPs should address their national authority.
Section 2a of Chapter 4 of Title XI of the VAT Directive applies to PSPs as defined under the Payment Service
Directive (Directive (EU) 2015/2366 of 25 November 2015), to payment services provided within the Union.
Therefore, PSPs outsid e the EU (namely those PSPs that provide payment services only outside the EU) are
outside the scope of the reporting obligations. That is why, when the payee’s PSP is located outside the EU the
payer’s PSP will be subject to the obligations laid down in S ection 2a of Chapter 4 of Title XI of the VAT
Directive.
2.1.1.2 Will Northern Ireland be treated as part of the EU for reporting requirements?
The VAT Directive is still applying in Northern Ireland but only concerning goods (see Annex 3 of the Protoc ol
on Ireland and Northern Ireland EUR-Lex - 12020W/TXT - EN - EUR-Lex (europa.eu) . Therefore, PSPs located
in Northern Ireland must be considered as established in a third country and are not subject to the reporting
obligation pursuant to Section 2a of Chapter 4 of Title XI of the VAT Directive.
For more details of the application of that Section to third countries see 2.1.1.1.
Therefore, for payments to payees located in Northern Ireland, the payer’s PSP located in any Member State will
have the reporting obligation as long as the conditions established under Article 243b of the VAT Directive are
fulfilled.
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2.1.1.3 Will paym ents made to/from United Kingdom Sovereign Base Areas of Akrotiri and
Dhekelia, and Monaco need to be reported in CESOP?
Pursuant to Article 7 of the VAT directive “ in view of the conventions and treaties concluded with France […]
and Cyprus respectively , the Principality of Monaco […] and the United Kingdom Sovereign Base Areas of
Akrotiri and Dhekelia shall not be regarded, for the purposes of the application of this Directive, as third countries.
Therefore, only a specific convention or agreement conclud ed on bilateral basis (and not by EU agreements)
respectively with France and Cyprus would result in the application of the new obligations for PSPs (laid down
in Section 2a of Chapter 4 of Title XI of the VAT Directive) in Monaco, Akrotiri and Dhekelia. Without a specific
convention or agreement , this new obligation cannot be imposed on the mere basis of Article 7 of the VAT
Directive.
In conclusion, Monaco, Akrotiri and Dhekelia must be considered as third countries for the application of Section
2a of Chapter 4 of Title XI of the VAT Directive.
For more details of the application of that Section to third countries, see 2.1.1.1.
Therefore, for payments to payees located in Akrotiri, Dhekelia and Monaco, the payer’s PSP located in any
Member State will have the reporting obligation as long as the conditions established under Article 243b of the
VAT Directive are fulfilled.
2.1.1.4 Should payment transactions be reported by the payer’s PSP if the payee’s PSP is in an
EEA country?
It depends.
PSPs in EEA countries can obtain a payment licence in their home country and use passporting rules to provide
for payment services in the EU even without a physical presence in any of the Member States. In that case, PSPs
in EEA country might be subject to the reporting obligation when they provide payment services in the EU
Member States.
Here we can see the following situations:
• the EEA PSP acting as payer’s PSP in Member State 1: that PSP will report in Member State 1 the
payments from that payer to any third country (including EEA countries);
• the EEA PSP acting as payee’s PSP in Member State 1: that PSP will report in Member State 1 t he
payments received from other Member States.
Case: Direct Debit system. The payee’s PSP is in a) Norway or b) Poland and payer account is in Estonia. Who
reports in a) and b)?
The general rule is that when the payee’s PSP is in one Member State, then the reporting obligation is up to the
payee’s PSP. When the payee’s PSP is in a third territory or third country then the payer’s PSP will report. Norway
is an EEA country and payments to EEA countries shall be considered as payments to third countries. In such
cases, the PSP of the payer located in a Member State will report the payment in the Member State of the payer.
So, for case a) the report must be done in Estonia by the payer’s PSP as the payment is done to a bank account in
Norway. For case b) the report must be done in Poland by the payee’s PSP as the payment is done to a bank
account in Poland.
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2.2 PAYMENTS AND PSPS IN SCOPE
2.2.1 Do only e -commerce transactions need to be reported or also payment s at the physical
premises of the merchant (POS)?
The conditions are those defined in the legislation and could include all kind of transactions (e-commerce and/or
physical), see Art. 243a (3) of Directive 2006/112/EC. Where applicable, the PSP shall indica te whether the
payment is initiated at the physical premises of the merchant (Article 243d(2)(e)).
2.2.2 Are payments in cryptocurrencies under the scope of the reporting obligation pursuant to
Article 243b of the VAT Directive?
No, they are not in scope.
2.2.3 Do payments made to escrow account, mortgage accounts, or accounts connected to credit
cards fall under the reporting obligation?
The Payment Service Directive defines the payment account as an account held in the name of one or more
payment service users, which is used for the execution of payment transactions.
As long as an account is used with that purpose, then payments to or from that account are in the scope of the
reporting obligations regardless the name of that account, or wheth er that account is used for other purposes as
well. The name of an account is not relevant as such.
This principle applies also to the following cases that are to be considered as examples and are not exhaustive.
Escrow
Escrow is a financial agreement whereby an asset or money is held by a third party on behalf of two other parties
that are in the process of completing a transaction.
Escrow accounts are managed by the escrow agent. The agent releases the assets or funds only upon the fulfilment
of predetermined contractual obligations (or upon receiving appropriate instructions). Money, securities, funds,
and other assets can all be held in escrow.
Escrow accounts – as such – are excluded from the application of the Payment Service Directive (Directive (EU)
2015/2366) pursuant to Article 3 (h) and (i). In fact, the Directive does not apply to payment transactions related
to security assets servicing, including dividends, income or other distributions, or redemption or sale, carried out
within a payment or securities settlement system or by investment firms, credit institutions, collective investment
undertakings or asset management companies providing investment services and any other entities allowed to
have the custody of financial instruments.
As such, any funds or assets flows in that account are not in the scope of the reporting obligation. However, in
case that account is also used to execute and receive payments then those payments are in the scope of the
obligations under Article 243b of the VAT Directive.
Loan
In a case where the loan account also qualifies as a payment account pursuant to the PSD2, these payments are in
the scope of the reporting obligations when all the other conditions laid down in Article 243b of the VAT Directive
are fulfilled.
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Accounts connected to credit card
The payments to accounts connected to credit cards are included in the reporting obligations. For more details see
section 2.4.4. of the guidelines for the reporting of payment data.
2.2.4 Are MT202 transactions in scope of the VAT Directive?
MT202 is a SWIFT message format for financial settlements between financial institutions. It is used to order the
movement of funds to the beneficiary institution via another financial institution/Intermediary Bank. As such,
they do not fall under the reporting obligation.
2.2.5 Do cross-border payments need to be reported when the payer and the payee are the same
person holding different payment accounts?
If both accounts are held by the same person, in most cases the payment will not be regarded as cross -border as
one and the same person will of course be located in the same location.
However, if based on the location identifiers that best represent the locations, the payment is considered a cross -
border payment in line with article 243c, and if the payee receives more than 25 cross -border payments in the
reporting period then it must be reported.
2.2.6 Are intra-group payments in the scope of the reporting obligation?
Only when the intra -group transactions fulfil the conditions defined under Article 3(n) of the Payment Service
Directive (PSD2) ((Directive (EU) 2015/2366) are excluded from the application of the PSD2 and, thus, from the
scope of the reporting obligation.
2.2.7 Are payments from/to non -taxable persons (e.g. non -profit institutions, individuals, etc.)
also included in the scope of the reporting obligation?
The legal form or status of the payers and payees are not relevant for the reporting obligations of PSPs under the
VAT Directive. Therefore, the payments to or from non-taxable persons will need to be reported if all conditions
defined under Article 243b of the VAT Directive are fulfilled.
CESOP Guidelines section 3.2.
2.2.8. Are winnings made from betting according to Directive 2020/284 payment refunds of the
initial wager?
No, these kinds of payments are to be considered as payment transactions as such and follow the reporting rules
accordingly.
2.2.9. Is a payment intermediary that collects cross-border payments from different payers (using
different payment’s methods e.g. cards, credit transfers, e -wallet etc…) and then transfers
those payme nts to the payees is to be considered as a PSP that has CESOP reporting
obligations?
Payment intermediaries, such as Collecting payment service providers (cPSP), are intermediaries between the
merchant and the payer PSPs (which could be banks or credit c ard issuers or others). The payers’ PSP transfer
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the payments to the cPSP’s account and subsequently the cPSP transfers the funds to the merchant’s account in
one settlement.
Following their payment license, the cPSP can act as both payer’s PSP and payee’s PSP, and the cPSP will report
the payments when the conditions laid down under Article 243b of the VAT directive are fulfilled.
2.3 CARD PAYMENTS
2.3.1 Do chargebacks to cardholders need to be considered for the reporting?
Yes, see table s in the CESOP Guidelines, sections 4.5.2 and 4.5.2.4 . If a reference to the original payment is
included, it should be reported as part of the transaction ID in box 7 and 14.
2.3.2 Who is responsible for the reporting of data in a 3 - party card scheme?
The normal rules apply in order to determine the reporting PSPs. If the payee’s PSP is in a third country or third
territory the payer’s PSP in the Member State will report the payment transactions. If the payee’s PSP is in a
Member State it will report the payment transaction (and not the payer’s PSP)
Please also note that as highlighted in the graph below, 3 -party card payments generally involve other payment
services providers (such as banks) to fund the card’s credit line or to receive the funds from the commercial
acquirer. For these PSPs the transactions will look like a payment to the card issuer (for the payer’s payment
service provider) or a transaction from the commercial acquirer to the payee (for the payee’s payment service
provider). These transactions, although different from the one between the payer and the payee, are in scope of
the reporting obligation and should be reported with either the card issuer as the payee, or the commercial acquirer
as the payer. Indeed, they do not fall within the exclusion of article 3 (m) PSD2 for transaction between payment
service providers for their own activities, since they do not serve the activities of the payment service providers
involved but are part of the agreement between the payer/payee and the card issuer/commercial acquirer.
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Example:
A payee X with a bank account in Ireland (merchant) receives payments via cards (both at the point of sale –
POS- and online payments) and has an Acquirer in Luxembourg for the collection of such payments.
Each day the payee X receives 300 POS payments (200 are from cards issued in Ireland and 100 from other EU
Member States cards) and through its online portal receives another 200 payments (150 are from cards issued in
Ireland and 50 from other EU Member State cards).
Therefore, the payee X receives daily 500 payments, 350 domestic and 150 cross-border.
As these are card payments, while the payee X receives 500 card payments a day, he does not receive 500
individual payments to its bank account. Instead, hi s Acquirer will do a daily bulk credit for the total value (e.g.
€8,000) and then provide a report of what the €8,000 is made up of.
Therefore, the payee X bank in Ireland will see a single bulk payment from the Acquirer in Luxembourg, and not
all the 500 payments.
Bank in Ireland Acquirer in Luxembourg
If in quarter 1, the bank in Ireland
receives let’s say 10 of such bulk
payments from the Acquirer in
Luxembourg, the 25 cross -border
threshold is not exceeded, and then the
bank in Ireland has no report ing
obligations.
The Acquirer will transmit to
Ireland the reports on the 150
cross-border payments a day.
If in quarter 2, the bank in Ireland
received let’s say 30 of such bulk
payments from the Acquirer in
Luxembourg, the 25 threshold is
exceeded, and then the Bank in Ireland
will report these 30 payments that the
payee in Ireland has received from the
Acquirer in Luxembourg.
The Acquirer will transmit to
Ireland the reports on the 150
cross-border payments a day.
2.3.3 How should location rules apply in card payments?
See the following examples:
A) Payer, payee, and payment service providers in different Member States: In this situation the payer
and the payee are both located in different Member States and use the services of pa yment service
providers from their respective Member States to execute a card payment. For card payments, the
most relevant identifiers to use would be the BIN range of the payer’s card for the payer’s location,
and the address or identifier of the merchan t for the payee’s location. Both these identifiers will
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locate the payer and the payee in different Member States. The payment is thus cross border and
subject to reporting by the payee’s PSP.
B) Payer, payee in same Member State: In this situation the payer and the payee are both located in the
same Member State, but the payee uses the services of a payment service provider in another Member
State to execute a card payment. Given that both the BIN range and the merchant identifier or address
will refer to the actual position of respectively the payer and the payee, the payment will be
considered as a national payment and will not be reported.
C) Issuer and Payer in different Member States: In this situation the payer and the payee are in different
Member States while both the payer and the payee’s payment service providers are in the same
Member State. The payer uses the services of a card issuer in the Member State of the payee to
execute a card payment. For such cases, the BIN range must use the data on where the card has been
issued and not the data on where the card issuer is located. As such, the BIN range should indicate
that the payer is in a different Member State t han the payee and the payment should be considered
as cross-border and be reported by the payee’s PSP.
In general, it should be noted that if a payment service provider has different identifiers available that provide a
different location, it must choose the identifier that best reflects the location of the payee or payer . This is
particularly relevant where the payer or the payee may be using the services of an e-Money facility for the issuing
of a virtual card. In such cases , the identifier that is selected must be that which best reflects the real location of
the payee or payer . For example, a PSP performing KYC (Know Your Customer) and AML (Anti Money
laundering) checks on the account data indicating a different address. In that case, the PSP may consider the
address of that account to be a better reflection of location and use that identifier instead.
CESOP Guidelines, sections 3.1.2.4, 3.1.2.5 and 3.1.2.6.
2.4 ELECTRONIC MONEY
Does a PSP which is an e-wallet provider and allows e-money transfers between payers and payees
in different countries potentially have CESOP reporting obligations?
Yes, it does. If the payer is located in the EU and the payee is located in another country than the payer (EU
country or non -EU country), the e -money transfer from the payer’s e -wallet to the payee’s e -wallet must be
considered as a cross-border payment and in scope of CESOP. Whether or not the PSP actually will need to report
these transactions depends on several other criteria, such as the 25 transactions threshold.
Example: A PSP established in Germany offers e-money services to customers and merchants in all EU countries
(using passporting). On the website of a merchant in France, the possibility of paying to the e -wallet of the
merchant (with the PSP in Germany) is offered to customers when buying a product. A customer in Belgium has
an e-wallet with the same PSP in Germany and uses the e-wallet payment option at check out when ordering with
the merchant in France. As a result, the PSP in Germany moves e -money from the e -wallet of the customer in
Belgium (the payer) to the e-wallet of the merchant in France. This qualifies as a cross border payment, done by
a payer in an EU country (Belgium), and hence in scope of CESOP reporting obligations. In case the merchant in
France receives more than 25 cross border payments in a given calendar quarter, t he PSP in Germany will need
to report these payments for CESOP to the French tax authorities.
The funding of an e-wallet via a bank transfer involves a movement of money from the payer’s bank account to
the e-wallet provider’s bank account. This transact ion might need to be reported for CESOP (e.g. when cross
border and more than 25 transactions per quarter) by either the bank of the e -wallet provider (which acts as the
payee in this funding) or by the bank of the payer.
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Similarly, the pay -out from an e-wallet via a bank transfer involves a movement of money from the e -wallet
provider's bank account to the payee's bank account. This transaction might need to be reported for CESOP (e.g.
when cross border and more than 25 transactions per quarter) by eith er the bank of the payee, or the bank of the
e-wallet provider (which acts as the payer in this pay-out).
CESOP Guidelines, sections 2.1 and 3.1.2.7.
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3. MONITORING AND TRIGGERING OF THE REPORTING
OBLIGATION
Is there a minimum materiality monetary amount for triggering the reporting obligation?
No.
Will the registration for CESOP reporting by a non-established payment service provider in a host
Member State where the payment service provider operates potentially trigger other (tax related)
reporting obligations?
No.
3.1 CROSS-BORDER PAYMENTS - LOCATION RULES OF ARTICLE 243C
3.1.1 Do payments between payers located in any Member State and payees located in any other
Member State (intra-EU payments) trigger the reporting obligation?
Yes, as long as the payers are located in a Member State and the payee receives more than 25 cross border
payments in a given calendar quarter, all cross-border payments are in the scope of the calculation of the threshold
and of the reporting obligation. Payments executed from a payer in a Member State and a payee in the same
Member State (domestic payments), do not fall under the reporting scope.
3.1.2 What is the overriding indicator between the IBAN , the BIC and other identifiers to
determine the location of the payee/pay er when the different identifiers might lead to
different location? e.g. an account in an EU bank of a non-EU person?
The indicator or identifier to be used must be that which best reflects the actual location of the payee or payer in
line with Article 243c of the Directive.
As such, each payment service provider will need to analyse its own processes and payment products to determine
which indicator(s) to use that best reflects the actual location of the payee or payer . It is recommended that the
payment service provider documents this analysis and the conclusions made for further reference . All analysis
should focus on confirming the most accurate proxy to be used in line with Article 243c.
By way of illustration , for bank transfers, it will be accepted that the IBAN is a good indicator to use for the
location of the payer/payee. For other type s of payment transactions however, if a payment service provider has
different indicators available which provide a more accurate location of the payee or payer, the PSP must choose
the identifier that, in its specific situation, best reflects the actual location of the payee and payer. The correct
location of the payer is required to confirm the “country of origin” of the transaction in line with Article 243c.
For example: An E-money provider must choose the location that best reflects the location of the payee or the
payer. E-money institutions will have accurate location information gathered at onboarding for their clients .
Although E -money providers may provide different payment services and give access to different types of
payment method (E-wallet, E-voucher, E-cards, etc.) with different identifiers for each of them, they are required
to always chose the identifier or information which will best confirm the actual location of the payee and/or payer
in line with Article 243c.
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This obligation forbids payment service providers which have access to multiple identifiers to use only those that
give a less accurate location of the payer or payee for the purpose of simplifying where the reporting obligation
should occur.
The below provided table is only indicative and other elements could be used by the PSP to locate the payer and
payee if deemed more relevant. PSPs should refer to their national authorities in case of doubts.
Table of identifiers to determine the location of the payer and payee
3.1.3 If both the payer and the payee are located outside the EU, is there still a reporting
obligation of the PSP?
If both payer and payee are considered as located outside the EU based on the identifiers mentioned above, the
transaction is not in scope.
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3.2. THRESHOLD OF MORE THAN 25 CROSS-BORDER PAYMENTS UNDER
ARTICLE 243B (2)
3.2.1 When the threshold is reached, does each single payment need to be reported, or just the
ones above the threshold?
Each single payment must be reported.
3.2.2 Do PSPs need to aggregate every kind of payment in scope of the legislation (transfers,
cards etc.) for the same payee to calculate the threshold?
Yes. The payment method used does not impact for that purpose. All the payments should be considered
regardless the pa yment method used. In addition, where the payment service provider has information that the
payee has several identifiers/accounts, the calculation shall be made per payee.
3.2.3 Which data elements should be used by payers’ PSPs to aggregate payment information
referring to the same payee?
Preliminary remark: we mention below a non -exhaustive list of use cases to demonstrate on which basis the
decision to aggregate could potentially be made . In general, however, where there is a reasonable doubt on
whether it actually is the same payee, no aggregation sho uld take place. This should be analysed based on the
information available to the payment service provider and based on the specific circumstances of the payment
service provider.
Case 1: payment accounts with the same name but different VAT/tax numbers.
In order to determine whether a payee behind multiple payment accounts is actually a single entity, payment
service providers have some information at their disposal, including information collected during the creation of
the payment account. While the information at disposal of the payee’s PSP might be accurate and allow the precise
identification of different accounts opened by the same payee, the payer’s PSP have less certainty as regard the
real identity of different payees. Therefore, it is reasonable not to proceed to any aggregation if there is no strong
indication that the payee is actually a single entity. A VAT/tax number is a data element with a higher degree of
uniqueness than a name. As such, accounts with the same name and different VAT/tax number should not be
aggregated. See the franchise case in section 3.2.3.3 of the guidelines.
Case 2: The payee’s name is the same, but the payee’s IBAN is different.
Names can be subject to mistake, and companies could switch between their legal and business name. Howe ver,
the name remains a strong indicator that two payees might be a single entity when coupled with the address or
other information available to the payment service provider.
Case 3: What rules should be applied to determine if the payee with the account in a third country
is the same as the payee with the account in a Member State?
The payers’ PSP might have little information in order to aggregate different payees. In case of uncertainty, it is
reasonable to treat different payees as different entities, and not to proceed with the aggregation.
Case 4: The address is different, but the name is exactly the same.
It would be reasonable to treat the payee with the same name but different addresses as two separate entities,
unless there are other elements th at indicate that it is the same payee (e.g. same mail address, or same account
number etc…).
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Case 5: the name is slightly different: how to find out if it is the same person, or completely different
individuals/entities?
It would be reasonable for the PSP to not proceed with fuzzy matching, unless there are other elements that
indicate that it is the same payee (e.g. same mail address, or same account number etc..).
Case 6: Same VAT number.
The same VAT number is generally a good indication that it concerns the same payee. However, there might be
use cases where different payees share the same VAT number (e.g., VAT grouping).). The VAT group is a VAT
concept where several entities can decide to form a single VAT group and be regarded as a single taxable person
for VAT purposes (1). However, for all other purposes, each company maintain its legal status and therefore each
company under the VAT group is to be considered as an individual legal entity and, as such, as individual payee.
However, when sending the records to Member States for the CESOP, the data should not be aggregated per
payee nor changed or altered (the aggregation only applies for the calculation of the threshold).
Case 7: Same BIN or IBAN and slightly different names.
The same BIN or IBAN are strong indicators of the same payee.
Still PSPs can use the information available in their records to proceed with the aggregation of payees for the
calculation of the threshold, when they are aware that different payees are actually the same entity.
However, when sending the records to Member States for the CESOP, the data should not be aggregated per
payee nor changed or altered (the aggregation only applies for the calculation of the threshold).
Finally, aggregating (for threshold calculation) is ex pected to be a best effort obligation for PSPs. Due to the
multitude of elements and fuzziness of many, PSPs are expected to do a best effort, but it would be difficult for
any PSP to do aggregating conclusively without demanding disproportionate efforts from the PSPs. Therefore, in
case of uncertainty, it is reasonable to treat different payers or payees separately for CESOP reporting, and not to
proceed with the aggregation.
3.2.4 Is it true that the aggregation of payment accounts in application of Article 243b (2) VAT
Directive should only be performed in relation to the calculation of the threshold, but the
data of different payment accounts should never be aggregated?
The aggregation pursuant to Article 243b (2) is needed in order to monitor and determine the threshold of more
than 25 cross-border payments per payee.
When that threshold is reached (more than 25 payments per payee), the PSP shall transmit the “detailed”
information indicated in Article 243d of the VAT Directive to the Member States.
Therefore, the reporting under Article 243d will be detailed (at the level of single payments received) per each
payee identified based on the “aggregation” carried out pursuant to Article 243b(2).
CESOP Guidelines section 3.
(1) Judgment of 22 May 2008, Ampliscientifica and Amplifin, C-162/07, EU:C:2008:301
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3.2.5 What are the principles for counting payments and calculate the thresholds when a PSP
operates cross-border, having both branches and subsidiaries?
According to Article 243b(2) second subparagraph and (4), the number of cross -border payments should be
calculated by each PSP per Member State in which services are provided.
Accordingly, each branch and subsidiary will have to calculate its own threshold based on their own payment
transactions.
Some cooperative banking structure can have separate banks inside this coopera tive with separate reporting
obligations and separate calculation of their own threshold.
3.2.6 Where the payee has branches in several countries, and each branch has a separate
payment account, do these branches need to be considered as separate pay ees (with their
respective location) or as one payee together with the head office (and one location, i.e., of
the head office) for the aggregation rule?
According to point (9) of Article 4 of Directive (EU) 2015/2366, ‘payee’ means a natural or legal person who is
the intended recipient of funds which have been the subject of a payment transaction. As a branch is not a separate
legal person, it should be considered for CESOP reporting (and threshold determination) together with its head
office where the payment service provider has sufficient information to clearly identify that it concerns the same
legal person. For example, a Dutch company has a legal branch in Belgium. They have two bank accounts with
a Dutch bank’s establishment in the Netherlands – one used for the activities in the Netherlands and the other for
the activities in Belgium. For the calculation of the threshold, payments to both bank accounts should be regarded
as payment to one payee, i.e., the Dutch company, where the payment service provider has clear indications the
branch and the head office are one and the same legal entity.
On the other hand, using the same example, where the company’s Dutch head office has a bank account with the
Dutch bank’s establishment in the Netherlands, a nd its branch in Belgium has a bank account with the Dutch
bank’s branch in Belgium, payments to the Dutch bank account of the company’s head office should not be
aggregated with the payments to the Belgian bank account of its Belgian branch, for the calcu lation of the
threshold (see point 3.2.3.6 and figure 37 of the guidelines).
3.2.7 Are refunds included in the calculation of the thresholds?
“Technical” refunds as defined in Article 76 of the PSD2 are always in the records of the PSPs (e.g. refun ds due
to technical errors in the original payment transaction).
Other kind of refunds (for instance due to goods returned to the seller) are not always in the records of the PSPs.
When a PSP is not aware of the refund, it is not asked to verify whether any given payment is a refund or not. As
such, evidently this will be computed in the calculation of the threshold.
Still, there are cases where PSPs have this information at their disposal.
For instance, a payment through an e -wallet could be refunded by the seller to the consumer using the same e -
wallet and referring to the original purchase. In such a case, most likely the e -wallet will have the necessary
information to link the refund to the original payment.
Therefore, when a PSP is aware of the refund, this refund is not computed in the calculation of the threshold. This
rule applies both when the refund is in the same reporting period of the original payment and when the refund is
in a subsequent reporting period of the original payment.
The known refunds shall be reported as indicated in the Guidelines, section 4.5 and in the User guide point 3.3.4.
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3.2.8 When the payer’ PSP is reporting, should the PSP determine the 25 transactions threshold
based on number of payments made by one payer only?
No, the payer PSP must determine the threshold considering all transactions made to the same payee.
3.2.9 When the payer’ PSP is reporting, should that PSP include payments to payees
located in the EU in the calculation of the 25 transactions threshold?
Article 243b (3) defines the obligations for the PSP of the payer: the requirement laid down in paragraph 1 shall
not apply to payment services provided by the payer PSP as regards any payment where at least one of the PSPs
of the payee is located in a Member State, as shown by that PSP’s BIC or any other business identifier code that
unambiguously identifies the PSP and its location. The PSPs of the payer shall nevertheless include those payment
services in the calculation referred to in par. 2.
Example: A payment service provider from M ember State 1 (payer PSP) executes payment transactions to a
payee that has a payment account in Member State 2 and another in a third country. Over a given
quarter, the PSP of the payer executes: 200 payments to th e payment account in M S 2, 20 payments
to the payment account in the third country. Pursuant to Article 243b, all the conditions to trigger the
reporting obligation are fulfilled. H owever, the PSP of the payer will not report the payments to the
payment account in MS 2, as those will be reported by the PSP of the payee in MS 2.
It will however have to report the payments to the payment account in the third country, as the
threshold must be calculated inclusive of the payments to the payment account in Member State 2 and
is therefore exceeding 25 cross-border payments.
Finally, the payer PSP in calculating the threshold will have to consider all transactions made to the
same payee, both intra and extra EU.
CESOP Guidelines section 4.3.
3.2.10 Payments from a payer located outside the EU should not be reported to CESOP. Does
this mean that they should not even be included in the calculation of the 25 transactions
threshold?
Payment transactions from a payer located in a third country to a Member State are not included in the reporting
obligation. Therefore, such transactions should not be included in the threshold calculation.
3.2.11 Should part payments have to be calculated as one single transaction or separate
transactions?
Example: a payer borrows a credit from a PSP to pay a product or service. The payer pays a “part payment credit”
to that PSP that in that case is also a credit institution. That PSP will settle the whole amount to the payee
(merchant) at once.
For the calculation of the threshold, that PSP will consider one single payment. In fact, the payment from the PSP
to the merchant is the transaction that matters on the calculation of the threshold, while the credit from the PSP
to the payer is a loan contract between the consumer and the PSP/financial institution and not a payment
transaction.
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4. REPORTING
4.1 A Payer’s PSP will not have to report intra-EU payment transactions because they are
reported by the payee PSP. Does the p ayer’s PSP have to keep the records of these
transaction for the three years period?
No. The legal requirement of three years detention period applies only to the information that is transmitted, and
not to the information used for the monitoring of the threshold.
4.2 Payments from payers located outside the EU do not have to be reported . Does the payee
PSP have to record these transactions?
No. The three years detention period applies only to the information that is transmitted.
4.3 If there are no transactions to be reported, what (level of) documentation should a PSP
have available in its files to evidence this?
None on EU level. PSPs are advised to consult their national authorities on that.
4.4 Data protection principle: i s the transmission of data below the threshold in line with
personal data protection?
No. PSPs cannot transmit payment data if the thresholds are not exceeded. However, the data reported per payee
can have less than 25 transactions (see example in section 4.3. of the Guidelines and the example in the answer
under question 3.2.9 above).
4.5 What if a PSP reports on a payee less than 25 payments? Will CESOP reject this report?
The submission of data under the threshold shall be considered as non -compliant with the rules established by
Art. 243b of Directive 2006/112/EC. However, there could be cases where – even though the 25 threshold is
exceeded, still less than 25 transactions are reported (see question 3.2.9).
Furthermore, there might be national arrangements a nd legislation addressing the reporting of less than 25
payments. PSPs are advised to consult their national authorities on that. CESOP will receive data from national
authorities and not from the PSPs. Therefore, CESOP as such will not reject the file.
CESOP Guidelines sections 4.1 and 4.2 and XSD User Guide section 3.2.1.1.
4.6 How often shall the data be reported?
PSPs are required to keep sufficiently detailed records of the payees and the payments they receive each calendar
quarter to enable the competent authorities of the Member States to carry out controls of the supplies of goods
and services, which are deemed to take place in a Member State, in order to achieve the objective of combating
VAT fraud. Each Member State shall collect the informa tion from PSPs no later than by the end of the month
following the calendar quarter to which the information relates.
This constitutes the period over which information shall be collected and referred to. There is no specific reference
to monthly count.
CESOP Guidelines section 4.2.
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4.7 Will there be cases in which more than one PSP may be obliged to report? How can double
reporting be avoided?
Article 243b does not create a limit regarding the number of PSPs that should report the transaction. Therefore,
based on their business model, if more than one PSP is involved in the payment from the payee’s side (for example
because of subcontracting, or card payment), then all PSPs of the payee shall be responsible to report data. Double
reporting as such is not something to be avoided and might increase the overall quality of the information in the
CESOP.
CESOP Guidelines, section 4.3.
4.8 Are branches obliged to report on their own the payment data to the tax authority of the
respective host Member State?
According to Article 243b(4)(b), PSPs shall report the payment data per Member State where they provide for
payment services. Thus, the registered office or the head office will report to the home Member State. A branch
or an agent will prov ide information to the host Member State(s). PSPs should follow the actual use of their
payment license to determine where they provide services.
4.9 Are branches obliged to report on their own the payment data to the tax authority of the
respective host Member State even when they have no physical presence in the host
Member State?
According to Article 243b(4)(b), PSPs shall report the payment data per Member State (MS) where they provide
for payment services, regardless of whether there i s any kind of physical presence or not, and including the
scenario where the payment services are actually provided in a Member State other than its home Member State
on the basis of the right of establishment or the freedom to provide services (‘passporting’).
In order to establish to which Member State the information should be transmitted, and which PSP has the
reporting obligation, the rules of Article 243b of the VAT Directive apply. For example, if the payer is located in
a Member State and the payee is located in another Member State and the PSP of the payee is providing payment
services making usage of passporting rules in the payee’s Member State, this PSP has reporting obligation in the
Member State of the payee.
A PSP must inform the authority of the host Member State before it can provide payment services in its territory
based on the payment license, which is then documented in the register of PSPs of that Member State. If the
passport mentioned in that register is actually being used , and using the information available from its client
database, a PSP should be able to clearly identify which services are provided and where.
List of typical scenarios:
a) Headquarter in one Member State, no branches, no activity under passporting regime: All applicabl e
CESOP reporting will take place within that Member State.
b) Headquarter in Member State 1, branches in Member State 2 and 3: according to Article 243b of the VAT
Directive, that PSP should report either in Member State 1, or 2 or 3 (or in the 3 Member Stat es)
depending on whether the payment services are provided.
c) Headquarter of PSP in Member State 1, branch in Member State 2, providing services under passporting
regime into the rest of EU (other 25 MS): according to Article 243 b of the VAT Directive, the PSP will
report to the home Member State and to the other Member States where the payment services are
provided.
Under scenarios b) and c) the PSP can decide whether the Headquarters will submit the report to all the relevant
host Member States (on behalf of the branch). See Question 4.10 below.
CESOP Guidelines sections 4.4, 4.4.1.
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4.10 PSPs with a branch/subsidiary in another MS : how should the data be submitted by the
headquarter or by the branch/subsidiary?
According to the definition of the PSD 2, the home Member State will be the Member State where a payment
service provider has requested and obtained its payment license, which should correspond to the Member State
in which it has its registered office or head office.
The host Member State on the other hand will be any Member State other than the home MS in which the payment
service provider is providing payment services.
Pursuant to Article 243b(4)(b) the records shall be made available to the home Member State of the payment
service provider, or to the host Member States when the payment service provider provides payment services in
Member States other than the home Member State. It should be noted that the use of identifiers for determining
the location of payee or payer in line with Article 243c cannot be used to simplify the obligation of a PSPs to
provide the records to the home or host member state in line with Article 243 (4)(b). PSPs are obliged to follow
their payment licence and report in each jurisdiction where it provides services pursuant to Article 243b(4)(b).
CESOP Guidelines sections 4.4, 4.4.1.
Examples: 1) A PSP has a payment license from Member State 1 and also supplies payment services in Member
State 2 via a branch, and Member State 3 via an agent. In application of the rules, this PSP will have
to report the payments it executes in Member State 1 to Member State 1, the payments it executes in
Member State 2 to Member State 2, and the payments it executes in Member State 3 to Member
State 3.
2) An e-money provider has a paymen t license to provide payment services from Member State 1.
It then uses passporting rules to provide payment services in all other Member States of the EU.
According to the rule of Article 243b(4), it will report data in all Member States for the respectiv e
payments it executes in each one of them.
3) An e -money provider has its payment license in Member State 1 and also provides payment
services in Member State 2 and 3. In order to determine what data should be reported in each Member
State, it will look at its payment license and where its clients are located in accordance with Article
243c. As such, if the e-money provider acts as the PSP of the payer for payments going from Member
State 1 to a third country, it will report these payments in Member State 1. If it acts as PSP of the
payee for payments going from Member State 3 to Member State 2, it will report these payments in
Member State 2.
4) If an EU e -money provider acts for both the payer and the payee in case of a cross -border
transaction within the EU, the e -money provider shall report this transaction in the Member State
where he provides the payment services to the payee in accordance with article 243b, 3.
However, the Directive does not specify whether the headquarters or the branch must transmit the information to
the home or host Member State.
Therefore, the PSPs can decide that the headquarter will report in the Member State where it is established, while
the branches report in the MSs where they operate. In case a PSP has branches/subsidiaries in more Member
States, the data should be provided in each of the Member States where the payment services are provided.
On the other hand, the PSPs might also decide that the headquarters submit the records also on behalf of the
branches or subsidiaries as long as the information is transmitted to the right host Member State(s) (where the
branches and subsidiaries provide payment services). Should this be the case, the Headquarters should clearly
indicate its identifier and the identifier of the branch or subsidiary on which behalf is submitting the report.
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PSPs transmit the records to the national authorities and not directly to the CESOP. Therefore, it is advisable that
PSPs consult the national authorities for practical details.
4.11 Can a group arrange to have all information on the payee addressed to one (preferred)
Member State?
No, it is not possible to do any aggregation at one MS level only.
As mentioned above, the PSP will have to report the payments it executes in Member State 1 to Member State 1,
the payments it executes in Member State 2 to Member State 2, and the payments it executes in Member State 3
to Member State 3.
See Article 243b(4)(b) and CESOP Guidelines section 4.4.
4.12 Will there be a One-Stop-Shop solution for streamlined reporting?
No, there will not be any One-Stop-Shop (OSS). Data are reported to the home and host MSs depending on where
the headquarter, branch or agent is located and where payment services are provided.
4.13 When the requirements for the reporting obligation laid down in Article 243b of the VAT
Directive apply, if in a payment transaction a PSP is acting on behalf of both the payer
and the payee, is it correct to state that the PSP only needs to report the payment
transactions once?
Yes, that is correct. The PSP is not required to report the same payment transaction multiple times. The country
in which the PSP should report will depend on where the PSP provides the payment services to the payee in
accordance with article 243(b)(3) which is in most cases, linked to the location of the payee but not necessarily.
When the payee is located inside the EU, the PSP will report in the EU country of the payee, when the payee is
located outside EU, the PSP will report in the MS where the PSP provides the payment services to the payer in
accordance with article 243(b)(3) which is in most cases, linked to the location of the payer but not necessarily.
4.14 Similarly to 4.13, when a PSP has different roles in one and the same payment transaction,
is it correct to state that the PSP only needs to report the payment transaction once?
Yes, that is correct. A Payment Service Provider might have different roles in one and the same payment
transaction. It can for example be a card acquirer and also the e -money and e -wallet provider. The payment
transaction for which the PSP fulfils different roles, only needs to be reported for CESOP once by this PSP, and
not separately for each of its roles (see XSD User guide).
4.15 What is the payment amount to be reported for CESOP? Is this the amount paid by the
payer or the amount actually received by the payee?
The amount to be reported for CESOP is the amount actually paid by the payer (in the currency of this payment)
before any deductions by the PSP like the take rate, currency conversion fee, etc. The amount reported for CESOP
might therefore be higher than the amount actually received by the payee in his account. Also, it should not be
considered by the PSP whether the amount paid by the payee includes VAT or not.
Example:
A customer in Germany is ordering a new tablet from a merchant in Sweden. The price is 120 EUR (including
VAT) plus 10 EUR (including VAT) for the transportation. The PSP involved in the payment of this purchase
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collects 130 EUR from the customer. After deduction of its payment fees (2% or 2.6 EUR), the PSP debits 127.4
EUR on the account of the merchant. The payment amount to be taken into account for CESOP is 130 EUR which
is the total amount paid by the customer.
4.16 Should payment transactions be reported by the payer’s PSP if the payee’s PSP is in an
EEA country?
It depends.
PSPs in EEA countries can obtain a payment licence in their home country and use passporting rules to provide
for payment services in the EU even without a physical presence in any of the Member State. In that case, PSPs
in EEA countries might be subject to the reporting obligation when they provide payment services in the EU
Member States
Here we can see the following situations:
the EEA PSP acting as paye r’s PSP in Member State 1: that PSP will report in Member State 1 the
payments from that payer to any third country (including EEA countries);
the EEA PSP acting as payee’s PSP in Member State 1: that PSP will report in Member State 1 the
payments received from other Member States
Case 1: Direct Debit system. The payee’s PSP is in a) Norway or b) Poland and payer account is in
Estonia. Who reports in a) and b)?
The general rule is that when the payee’s PSP is in one Member State, then the reporting obliga tion is up to the
payee’s PSP. When the payee’s PSP is in a third territory or third country then the payer’s PSP will report. Norway
is an EEA country and payments to EEA countries shall be considered as payments to third countries. In such
cases, the PSP of the payer located in a Member State will report the payment in the Member State of the payer.
So, for case a) the report must be done in Estonia by the payer’s PSP as the payment is done to a bank account in
Norway. For case b) the report must be done in Poland by the payee’s PSP as the payment is done to a bank
account in Poland.
4.17 Should refunds be reported?
“Technical” refunds as defined in Article 76 of the PSD2 are always in the records of the PSPs (e.g. refunds due
to technical errors in the original payment transaction).
Other kind of refunds (for instance due to goods returned to the seller) are not always in the records of the PSPs.
When a PSP is not aware of the refund, it is not asked to verify whether any given payment is a refund or not. As
such, evidently this will be computed in the calculation of the threshold as a payment, and they will be reported
in case the threshold is exceeded.
Still, there are cases where PSPs have this information at their disposal.
For instance, a paymen t through an e -wallet could be refunded by the seller to the consumer using the same e -
wallet and referring to the original purchase. In such a case, most likely the e -wallet will have the necessary
information to link the refund to the original payment.
Therefore, when a PSP is aware of the refund, this refund is not computed in the calculation of the threshold. The
known refunds shall be reported as indicated in the Guidelines, section 4.5. and in the User guide point 3.3.4.
This rule applies both when the refund is in the same reporting period of the original payment and when the refund
is in a subsequent reporting period of the original payment.
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4.18 Should rejected payments be reported?
Rejected payments, or “technical” refunds as defined in Art icle 76 of the PSD2 are always in the records of the
PSPs (e.g. refunds due to technical errors in the original payment transaction).
Both the original payment and the technical refund are reported by the PSPs. This rule applies both when the
refund is in the same reporting period of the original payment and when the refund is in a subsequent reporting
period of the original payment.
The technical refunds must be reported as indicated in the Guidelines, see section 4.5.1, boxes 7 and 1 4 and in
the User guide point 3.3.4.
Technical refunds are not computed in the calculation of the thresholds.
Payment transactions that are not completed, for example a credit card transaction that is not authorised because
of lack of available funds on the payer’s payment ac count, should never be reported as they are not payment
transactions.
4.19 Should a refund be reported if the original payment was not reported?
No. If a PSP is aware that a refund refers to an original payment (even processed in a precedent reporting period)
that was not reported, then the refund does not need to be reported.
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5. DATA ELEMENTS
5.1 Can the payment transactions to be reported be broken down according to the type of
transaction (cards/credit transfers/direct debits/instant payment)?
Yes, this can be done. But as indicated above, all transactions made to the same payee need to be accumulated
for the purpose of calculating the threshold.
5.2 No information about the payer should be reported, except that relating to his/her state of
origin. In this regard, should records be kept with more details about the payer if needed
for investigation?
The list of data that needs to be reported is laid down in Article 243d of Directive 2006/112/EC. Point 2. (c) lists
the details that shall be contained in the information.
Regarding the payer location information, the information used to determine the origin of the payment, or the
destination of the refund shall be provided in accordance with Article 243c. The information can include any data
element available to the PSP, as described in box 11 (IBAN, address, card number, etc.). It is important to note
that this field shall only indicate what data was used, the data itself must not be transmitted.
This implies that PSPs will for example indicate that the location of the payer was established in a Member State
using the IBAN of the payer’s payment account. The IBAN of the payer itself, however, shall never be
transmitted. No other data must be retained at this regard. For national record keeping rules PSPs should refer to
national authorities.
CESOP Guidelines, section 4.5.1.
5.3 Is the “accounting date ” or the “value date ” relevant for the purpose of detecting the
transactions to be reported?
The date to be reported depends on the payment method. In box 8 of the different tables in section 4.5.2. of the
CESOP Guidelines there is a detailed indication of the dates to report per payment methods.
5.4. Which information has to be kept in the records of the PSPs, according to Art. 243d (2)
point d (“any reference which unambiguously identifies the payment “)? Would the
payment reference given by the payer fall under this point?
Payments and references must be unique, and it can be a code from 1 up to 40 characters granting any ref erence
which unambiguously identifies the payment for the PSP. This “payment unique identifier” should not be
confused with the description of the payment (which is normally a free text where the payee might indicate the
underlining purchase or other personal information) that must not be reported.
Reference is made to box 14 of the tables in section 4.5.2 of the CESOP Guidelines.
The name of the payer is never part of the reporting.
5.5 Is it mandatory for a PSP to submit a nil reporting to the CESOP information system?
Article 243b(4)(b) states that information must be made available to Member States when the requirements of
paragraph 1 are fulfilled. Therefore, nil reporting cannot be mandatory, but can be allowed on voluntary basis.
PSPs should address their national authorities.
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5.6 For a card issuer in a Member State with several cardholders located in a Member State
that send payments to payees located in several Member States: is there a need to produce
several sets of data?
The PSP, in this case the card issuer, must calculate the threshold per different payees. When the conditions laid
down in Article 243b of the VAT Directive are fulfilled, that PSP must submit different reports per each payee.
However, if the payee’s PSP is in another Member State, then the payer’s PSP does not have to report the payment
transactions. Basically, the payer’s PSP must report only when the payee’s PSPs are in third countries or third
territories.
5.7 Do PSPs have to send separate fil es depending on whether they act as payee ’s PSP or as
payer’s PSP?
No. There is only one format to be used by PSPs acting as both, payer and payee PSPs.
See XSD User Guide.
5.8 Is it necessary to report the payee’s address received on the transaction to be reported or
the payee’s address stored in the bank records?
If available, all addresses of the payee in the PSP’s records shall be reported.
Information and overview are given in the CESOP Guidelines section 4.5.3, Table 9 – Overview of data and
expected data quality levels.
5.9 If a PSP needs to make corrections to the file and, in the meantime, there are changes in
the name of the payee, is it supposed to report the name as it was originally, or as it is now,
or does it not matter at all?
The data must be reported as in the record of the PSP at the precise moment of the transmission.
If that change happens during the period, and VAT/TIN remained the same, the name change is not that crucial.
The PSP can just correct the mistake and always report at least the most up-to-date name in its records. PSPs can
also send both names if they have them both in their records.
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6. TECHNICAL QUESTIONS
6.1 Regarding the XSD and XSD User Guide versions, in case of any changes, how these will
be communicated and be put into action at EU and MS level?
The XSD and its User Guide are published on CESOP europa.eu website. In case of changes, they will be
communicated by Commission and compatibility with the previous version will be maintained for a period, when
possible, to allow all stakeholders to adapt their systems.
6.2 Regarding the MessageRefId defined by the PSPs, is there a standard to be followed to
guarantee uniqueness of the ID, time and space? Where can I find more information on
the MessageRefId?
Yes. However, with a very low probability, it is possible that two IDs generated/built as suggested in the XSD
UG are the same. Detailed information can be found in the [R01] XSD User Guide.
6.3 What happens in the case that within a reporting period, there is no data for the PSP to
report? For instance, when PSPs do not have any payments under the VAT Directive
2020/284 in a given quarter or the thresholds are not exceeded in a given quarter? Will nil
reporting be implemented in the XSD file, or will there be a simpler option available?
It is not mandatory to report in case of no transactions, or transactions below the threshold. Further information
can be found in the [R01] XSD User Guide.
6.4 As for the type of reporting data: are special characters, negative values and national
characters accepted by CESOP?
For some elements, special characters are allowed, but in other elements the input is limited. Detailed information
is given in the [R01] XSD User Guide.
6.5 How the PSP knows that the report submitted is correct? Is there any validation on behalf
of MS or CESOP?
Yes, validation messages are produced by CESOP. The detailed answer to such question can be fo und in [R01]
XSD User Guide.
6.6 Are there some minimum quality reporting standards used by CESOP in case a PSP has
not information like TIN, VAT number, Address, etc?
The answer to such question can be found in [R01] XSD User Guide; mandatory elements are the one for which
the value of ‘Mandatory nature’ column equals ‘Mandatory’.
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6.7 For transactions in third countries, the identifier of the payee may be different from
IBAN. Will the XSD tracking allow non-IBAN values to be captured?
Yes, the detailed answer to such question can be found in [R01] XSD User Guide.
6.8 Is CESOP going to adopt ISO 20022 standard for more structured reporting?
CESOP will not use this structure.
6.9 How are the main CESOP system IT and the individual MS IT teams connecting to ensure
successful submissions?
Data will be submitted via a secure and encrypted channel.
6.10 Can a PSPs send several files (also below the theoretical maximum size of 1GB) for the
same reporting period?
Yes, according to XSD Guide, when a PSP has a large amount of data to report the reporting shall split the data
over several payment data messages, in respect of the two following rules:
1. Each message cannot exceed the size of 1GB
2. Each message must be compliant with the XSD.
It is worth noting that some Member States could have lower limitations (than 1GB). In such a case, the PSP
would have to split the submission into smaller parts.