Cross-border data flow in the digital single market: study on data location restrictions (SMART 2015/0054)
Most of the aforementioned objectives aim to ensure the security and confidentiality of the information. However, the barriers highlight that a variety of controls are required or are considered appropriate to achieve those objectives. Therefore, to continue to meet the common objectives through this variety of controls suggests that greater alignment of those controls at the EU-level is needed. Given the high sensitivity of the data and the fact that its protection requires particular safeguards against even state intervention (i.e. even in criminal investigations lawyers’ records may not be seized without applying a specific protection procedure such as under the Bulgarian Bar Act, Bulgarian Professional Ethics Code of Lawyers, and Czech Advocacy Act as listed above), the evidence from interview reports indicates that an approach that relies on whitelisted specialized service providers may be advisable, since authorities may otherwise struggle to recognize protected information. 2.3.5 Tax and accounting records Overview and subtypes of data In section 2.2.2. above, we examined barriers that applied to a specific category of financial data, namely data which is subject to supervision by national regulators. However, other types of financial information may also be subject to regulatory barriers. We therefore asked correspondents to report specifically on:
Tax records, such as relevant information for personal or corporate tax declarations. Accounting documents such as invoices. It should be noted that EU level rules exist with respect to electronic invoicing and the storage of electronic invoices, specifically through the Sixth VAT Directive10. The latter permits electronic invoices and also allows invoices to be stored outside of national borders, provided that the invoices are immediately accessible to tax authorities. Thus, the EU legal framework as such inherently demonstrates a potential barrier (the requirement for data to be accessible to auditing authorities) and immediately provides the solution (a neutral requirement to ensure its accessibility via electronic means).
The following types of data were more specifically reported upon:
10
Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, see http://eurlex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32006L0112.
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