VATLive > Blog > EU VAT > EU VAT fraud Public Prosecutor established by 20 states - Avalara

EU VAT fraud Public Prosecutor established by 20 states

  • EU VAT
  • 09 October 2017 | Richard Asquith

EU VAT fraud Public Prosecutor established by 20 states

20 EU member states have agreed to establish an anti VAT fraud Public Prosecutor's Office, focusing on the trading block’s estimated €50bn VAT fraud issue, and other EU budget issue. An approval vote by the European Parliament on 5 October cleared the last approval for the group's creation.

The new independent ‘parquet’ (public prosecutor department) will come into place by 2020.  It will be based in Luxembourg, and be made up of seconded prosecutors from each participating state alongside EU prosecutors.  Any resulting prosecutions will only be heard in national courts.  Longer term, it is hoped that the new office’s scope will be widened to include terrorism and wider organised crime.

Its immediate remit will be to track and co-ordinate investigations into cross-border missing trader fraud whereby criminal gangs exploit the EU VAT regime’s nil-VAT rating on intra-community supplies.  This will cover fraud of €10m and above.  Also fraud affecting EU funds above €10k.

8 of the 28 EU states declined to join the initiative, including the Netherlands, Sweden, Hungary, the UK, Poland, Ireland, Malta and Denmark.

Separately, the European Commission provided an update last week on its plans to remove the nil VAT exemption on cross-border B2B supplies as part of its VAT Action Plan.

Latest news
Poland delays VAT cut to reform reduced rates
October 22, 2018

Poland’s Ministry of Finance has announced that it will recategorise many supplies to within the current reduced VAT rate category. However, this will mean Poland will not...
Hungary VAT registration threshold HUF 12m Jan 2019
October 17, 2018

Hungary has received permission to introduce an VAT registration threshold for businesses of HUF 12 million from 1 January 2019. This is approximately €48,000, based...
UK MTD pilot goes public; Oct 2019 groups & non-resident delay
October 16, 2018

HMRC announced today that it is opening the test pilot for its Making Tax Digital for VAT programme to the public.  However, HMRC also announced...

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.