EU 2020 tax authorities anti-VAT fraud cooperation
- Mar 6, 2020 | Richard Asquith
EU member states agreed in 2018 to strengthen administrative cooperation to help tackle VAT fraud. Most of the provisions came into place on 1 January 2020. It is part of the EU Action Plan for VAT and other reforms.
Measures to combat VAT evasion
The measures were originally proposed by the European Commission in 2017 as part of the VAT Package. The aim, along with other EU VAT reforms, is to help reduce the VAT Gap. This measures the difference between expected VAT revenues against actual collections, estimated at €137 billion by the European Commission for 2017.
Of particular focus is ‘missing trader’ and ‘carousel fraud’ where cross-border sales are purchased and resold, mis-stating them as zero-rated for VAT whilst the tax is actually collected and illegally withheld;
The key measures agreed by the member states are the following:
- Exchanging information between tax authorities without prior request;
- Joint VAT audits by member states;
- Procedures to refund VAT to taxable persons not established in the Member State of refund;
- Strengthening Eurofisc – a network of national tax officials – with a joint risk analysis capacity and the possibility to coordinate enquiries and cooperate with OLAF (European Anti-Fraud Office) and Europol in the disclosure of serious VAT fraud cases, and with the EPPO (the European Public Prosecutor’s Office);
- Tackling fraud involving the dual VAT regime applicable to cars by improving access to vehicle registration data; and
- Access for customs authorities to information in the registry of VAT identification numbers and the recapitulative statements (to avoid diversion of goods into the black market).