Most tax claims (or debts) due to national treasuries are collected promptly through spontaneous payment by the debtor. When the claims are not settled promptly, national tax administrations can resort to a range of powers to recover the claim. At the limit, the claim can be recovered through the seizure and sale of the debtor's property by the tax administration ("enforcement").
The original Community arrangements for mutual assistance between Member States were put in place because it was recognised that it was increasingly likely that the debtor, or recoverable assets belonging to the debtor, were within the jurisdiction of another Member State . Arrangements at Community level were necessary to ensure that taxpayers did not successfully evade their obligations in this way. These arrangements (Council Directive 76/308/EEC), though originally developed to cover agricultural levies and customs duties as sources of Community revenue (traditional own resources), were later extended to certain essentially national taxes with the addition of VAT (Council Directive 79/1071/EEC) and excise duties (Council Directive 92/108/EEC) to the scope.
The arrangements for recovery under the original rules became ineffective and were too complicated when the internal market has made citizens and assets increasingly mobile, where mobility could be abused to avoid payment of tax. To reinforce the rules the Commission made a proposal (COM(1998) 364), which was adopted by the Council in 2001 (Council Directive 2001/44/EC) with new rules coming into force on 1 July 2002.
The new rules extend the possibilities to recover also taxes on income and capital as well as taxes on insurance premiums. Recovery will be faster as the instrument permitting enforcement of the claim now shall be directly recognised and automatically treated as an instrument of the requested Member State . Furthermore it envisages for the recovery to be supported by an electronic communication system.
Commission Directive 2002/94 sets out detailed implementation arrangements concerning the Directive on tax recovery, dealing with matters such as the details of the electronic communication system, shorter deadlines for responses, simplification of administrative procedures and reimbursement arrangements for costs linked to recovery of debts. Commission Directive 2004/79 applied these implementing arrangements to the new Member States.