The European Commission has proposed an amendment aimed at strengthening cooperation between the European Public Prosecutor’s Office (EPPO), the European Anti-Fraud Office (OLAF), and EU Member States, to combat tax fraud.
The proposed amendment would provide a legal framework for information exchange and access to VAT data by relevant authorities, ‘enhancing the EU’s ability to combat fraud against the financial interests of the Union’, the Commission said in a statement.
‘Carousel’ fraud
The integration of real-time digital reporting of cross-border trade, presented as part of the broader ‘VAT in the digital age’ strategy, will enable EU member states to gain access to valuable information required to step up the fight against tax fraud in the bloc, specifically Missing Trader Intra-Community (MTIC), or ‘carousel’ fraud.
This form of fraud is estimated to cost the EU between €12.5 billion and €32.8 billion every year, with carousel fraud forming part of the overall VAT compliance gap – i.e. the difference between the expected VAT revenues assuming full compliance and the actual VAT revenues collected – which was estimated at €89.3 billion in 2022.
‘A stronger, fairer tax system’
“Fighting VAT fraud is a priority for me and for the Commission,” commented Wopke Hoekstra, commissioner for Climate, Net Zero and Clean Growth. “This proposal will strengthen our ability to safeguard our financial interests and ensure fair play in the Single Market.
“Those who seek to profit through fraud will be held to account. With digital tools and better information sharing, we’re building a stronger, fairer tax system for everyone.”
According to the Commission, the proposed amendment would provide EPPO and OLAF with real-time access to VAT data, enabling rapid assessment of cross-border investigations, and providing a better platform for coordination, efficient data exchange and intelligence sharing.
‘By equipping these agencies with timely and comprehensive insights, fraudulent activities can be quickly identified, stopped, and prosecuted,’ it noted. “This enhanced collaboration not only strengthens the fight against cross-border fraud but also fosters a fair and just business environment across the EU.” Read more here.
