CESOP Registration and filing in Estonia
In the rapidly evolving landscape of Estonian financial markets, compliance with the Central Enterprise Securities Ownership Platform (CESOP) is critical. All payment service providers (PSPs) are obliged to collect and disclose transactional data regarding cross-border payments starting from January 1, 2024. For companies providing payment services in Estonia, registering and filing with the European Central Enterprise Securities Ownership Platform is a necessary and mandatory step. At Valcorp, we are dedicated to ensuring that your CESOP registration and ongoing compliance are handled professionally and efficiently.
What is CESOP?
The digitalisation of financial transactions makes the monitoring of cross-border e-commerce tax obligations such as VAT increasingly difficult for the tax authorities of different Member States. To combat this, the Central Electronic System of Payment was established under Council Directive (EU) 2020/284 (“PSP Directive”) and Council Regulation (EU) 2020/283. CESOP aims to provide Member State tax authorities with the means they need to identify potential online VAT fraud committed by providers from outside of the EU or in another Member State.
Who is affected by the CESOP?
Payments service providers (PSPs) in the European Union are impacted by CESOP.
This includes European branches with headquarters outside the EU. PSP’s include:
- Post office giro institutions providing payment services.
- Electronic money institutions providing electronic payment services such as electronic wallet providers and electronic voucher/card providers.
- credit institutions such as banks,
- Payment institutions.
- Additionally, small PSPs with a revenue of less than EUR 3 million.
- In some cases, commercial agents and electronic communication networks or services.
How does CESOP affect companies in Estonia?
As a result, payment service providers operating in Estonia are obligated to report to the tax authorities and maintain records of payees who receive more than 25 cross-border payments each quarter. Both the payee’s and the payer’s PSPs are required to keep records and submit reports. If one of the payee’s PSPs is situated in a Member State, the payer’s PSP is exempt from reporting responsibility, shifting it to the payee’s PSP. Domestic payments are not required to be submitted.The Estonia Tax and Customs Board will obtain this data from the payment service providers, which must be submitted by the end of the month following each quarter.
Where to file the CESOP report?
The report must be submitted in the country where the payment services are provided under the payment license. This may raise an obligation to file the CESOP report in multiple EU countries. The reports are to be submitted to the Estonia Tax and Customs Board. They will forward it to the CESOP system, where it will be stored, aggregated and cross-checked with other European databases.
In what form to submit the data to The Estonian Tax and Customs Board?
The information needs to be sent in XML format to the tax authorities using a standard form, with data fields set by the European Commission and shared by all payment service providers across all Member States. Payment service providers are allowed by the Estonian Tax and Customs Board to either:
- send data using X-tee (automatic data exchange, ZIP file); or
- by uploading a file through the e-MTA e-services environment (XML or ZIP).
The ZIP file can contain only one XML file. Both the XML as well as the ZIP file can be up to 1 GB in size.
Compliance with CESOP requirements increases the transparency and marketability of your company. It also minimizes the risk of legal penalties and enhances corporate governance. We specialize in assisting corporations with seamless CESOP registration and filing, ensuring that your business adheres to Estonia’s stringent securities regulations.
How can VALCORP help with CESOP compliance in Estonia
- CESOP registration
- Quarterly filing services
- Consulting and representation
For further information and assistance on CESOP registration and filing, our legal team would be happy to assist you.