The EU cracks down on VAT fraudsters. The EC wants to strengthen cooperation between many institutions
2025-11-14 16:08
publication
2025-11-14 16:08
The European Commission on Friday proposed changes to EU law to strengthen cooperation between the European Public Prosecutor's Office (EPPO), the European Anti-Fraud Office (OLAF) and EU member states in the fight against VAT fraud.
The changes are intended to improve the exchange of data between the capitals of EU countries and between capitals and EU institutions regarding VAT.
This should increase the effectiveness of actions against cross-border fraud, including the so-called carousel fraud, which – according to the Commission – causes annual losses in the EU ranging from EUR 12.5 billion to EUR 32.8 billion.
The new rules are intended to give EPPO and OLAF immediate access to VAT data, which will enable faster detection and prosecution of fraud. The proposal also provides for the establishment of direct communication channels between the EPPO, OLAF and European tax fraud officials. This is intended to facilitate the coordination of cross-border investigations.
VAT carousel fraud is one of the most notorious and costly types of tax fraud in the EU. They involve obtaining a VAT refund or avoiding its payment during cross-border trade in goods.
The name “carousel” comes from the method used by fraudsters – the goods are sold repeatedly between different companies in different countries, creating a “carousel” of transactions, and at the end there is an attempt to recover VAT from the tax office in one of the Member States, although there is no basis for this. As part of this mechanism, fraudsters set up companies in various EU countries that they use to buy and sell goods.
The Commission's proposal will now go to the Council of the EU (member states), the European Parliament and the Economic and Social Committee. Once the European Parliament and the Council have reached a position on this matter, negotiations will begin on the final shape of the new regulations.
From Brussels Łukasz Osiński (PAP)
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