{"id":992467,"date":"2026-11-05T09:58:57","date_gmt":"2026-11-05T09:58:57","guid":{"rendered":"https:\/\/www.taxdesk.com\/?p=992467"},"modified":"2026-11-06T11:41:08","modified_gmt":"2026-11-06T11:41:08","slug":"cesopmarket-review-and-provider-considerations-for-payment-service-providers","status":"publish","type":"post","link":"https:\/\/www.taxdesk.com\/zh\/cesopmarket-review-and-provider-considerations-for-payment-service-providers\/","title":{"rendered":"CESOP:Market review and provider considerations for payment service providers\u00a0"},"content":{"rendered":"
\n

Background to CESOP<\/span><\/b>\u00a0<\/span><\/h4>\n

CESOP has required EU payment service providers (PSPs) to record and report cross-border payment data since 1 January 2024, giving tax authorities a payment-side view of e-commerce sellers that VAT returns alone do not provide.<\/span>\u00a0<\/span><\/p>\n

The regime rests on three legal texts: Council Directive (EU) 2020\/284<\/span>, which places record-keeping and reporting obligations on PSPs; Council Regulation (EU) 2020\/283<\/span>, which creates the central database and the cooperation framework; and Commission Implementing Regulation (EU) 2022\/1504<\/span>, which sets the harmonised reporting format. At adoption the Commission estimated e-commerce VAT fraud at around EUR 5 billion a year (2015 figures).<\/span>\u00a0<\/span><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
Element<\/span><\/b>\u00a0<\/span><\/td>\nRequirement<\/span><\/b>\u00a0<\/span><\/td>\n<\/tr>\n
Who reports<\/span><\/b>\u00a0<\/span><\/td>\nCredit institutions, e-money institutions, payment institutions and post office giro institutions providing payment services in the EU<\/span>\u00a0<\/span><\/td>\n<\/tr>\n
Trigger<\/span><\/b>\u00a0<\/span><\/td>\nMore than 25 cross-border payments to the same payee in a calendar quarter; once crossed, every payment to that payee in the quarter is reportable<\/span>\u00a0<\/span><\/td>\n<\/tr>\n
Cross-border test<\/span><\/b>\u00a0<\/span><\/td>\nPayer in one Member State, payee in another Member State or a third country<\/span>\u00a0<\/span><\/td>\n<\/tr>\n
Who files<\/span><\/b>\u00a0<\/span><\/td>\nPayee’s PSP where it is in the EU; payer’s PSP only where the payee’s PSP is outside the EU<\/span>\u00a0<\/span><\/td>\n<\/tr>\n
Frequency<\/span><\/b>\u00a0<\/span><\/td>\nQuarterly, by the end of the month after quarter end (Q1 2024 was due 30 April 2024)<\/span>\u00a0<\/span><\/td>\n<\/tr>\n
Where<\/span><\/b>\u00a0<\/span><\/td>\nThe tax authority of each Member State in which the PSP provides payment services (home and host)<\/span>\u00a0<\/span><\/td>\n<\/tr>\n
Format<\/span><\/b>\u00a0<\/span><\/td>\nXML payment data message to the Commission XSD, filed through each national portal<\/span>\u00a0<\/span><\/td>\n<\/tr>\n
Retention<\/span><\/b>\u00a0<\/span><\/td>\nPSPs keep records for 3 years; CESOP holds data for up to 5 years<\/span>\u00a0<\/span><\/td>\n<\/tr>\n
Access<\/span><\/b>\u00a0<\/span><\/td>\nEurofisc anti-fraud officials of the 27 Member States and Norway<\/span>\u00a0<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\u00a0<\/span><\/p>\n

The data reported centres on the payee: name, VAT or tax number, IBAN or other account identifier, address where held, and the payee’s PSP identifier (BIC). Each payment carries date and time, amount, currency, Member State of origin, a unique transaction reference, a refund flag and a physical-premises flag. No payer name or purpose of payment is transmitted.<\/span>\u00a0<\/span><\/p>\n

National tax authorities validate the data and forward it to the central system, where it is aggregated across all reporting PSPs and cross-checked against VIES, OSS and IOSS registrations. A seller collecting through several PSPs therefore resolves to a single payee profile.<\/span>\u00a0<\/span><\/p>\n

Uptake and experience of PSPs<\/span><\/b>\u00a0<\/span><\/h4>\n

Around 1,700 PSPs now report to CESOP, roughly 350 of them in two or more Member States, according to the Commission’s CESOP simplification survey summary<\/span>\u00a0(February 2026). Ten quarters in, the regime has moved from implementation to business as usual, but data quality and multi-country filing remain the main pain points.<\/span>\u00a0<\/span><\/p>\n

Who is reporting<\/span><\/b>\u00a0<\/span><\/h4>\n

Of the 137 PSPs that answered the Commission’s 2025 survey, 55% were banks and 45% payment or e-money institutions. PSPs put registration at 25% and reporting at 46% of their total annual CESOP operating cost, so the burden sits in admin and submission rather than in the underlying data extraction alone.<\/span>\u00a0<\/span><\/p>\n

What PSPs have experienced<\/span><\/b>\u00a0<\/span><\/h4>\n
    \n
  • Validation failures.<\/span><\/b> Mismatches between data extracted from payment systems and CESOP technical validations have been the most common problem, with PSPs facing full or partial rejections and correction cycles (PwC Luxembourg<\/span>, October 2025).<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
      \n
    • Two-stage validation.<\/span><\/b> Files are checked first by the national portal and then asynchronously by the central system, which returns accepted, partially rejected or fully rejected. A full rejection means resubmitting the whole file; a partial rejection means a correction message for the affected payees only (MTCA correction mechanism<\/span>, July 2025).<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
        \n
      • National divergence.<\/span><\/b> Each Member State runs its own registration, portal, authentication and file-size rules. Portugal limits each file to 40,000 transactions, Poland splits files above 200 MB and the EU rejects any file over 1 GB (KAS Q&A)<\/span>.<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
          \n
        • Portal capacity.<\/span><\/b> Varying IT capacity at national tax authorities has caused delays in receiving validation results, which compresses the window for corrections.<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
            \n
          • Resourcing.<\/span><\/b> CESOP needs IT, data, legal and tax input. PSPs have chosen between building in-house, buying software or outsourcing, and many are now benchmarking that choice against ongoing cost.<\/span>\u00a0<\/span><\/li>\n<\/ul>\n

            \u00a0<\/span>Data quality is now the regulator’s focus<\/span><\/b>\u00a0<\/span><\/p>\n

            Member States and the CESOP Operational Team have identified recurring quality issues across PSP filings and issued a CESOP Data Quality Checklist<\/span> in June 2026. Hungary’s NAV has written to PSPs\u00a0<\/span>asking them to share it with internal teams and external providers. The issues it targets include:<\/span>\u00a0<\/span><\/p>\n

              \n
            • placeholder payee names such as “Unknown” or “N\/A” and inconsistent spellings that break aggregation<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
                \n
              • strings of payee names reported against clearing accounts rather than individual payees<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
                  \n
                • merchant terminal IDs used instead of IBANs or proper account identifiers<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
                    \n
                  • VAT and tax identifiers held in KYC records but not reported<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
                      \n
                    • amounts converted to euro rather than reported in the original currency<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
                        \n
                      • refunds not linked to the original transaction identifier<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
                          \n
                        • marketplaces reporting themselves rather than the underlying seller<\/span>\u00a0<\/span><\/li>\n<\/ul>\n