EU VAT FRAUD: ECONOMIC IMPACT, CHALLENGES AND POLICY ISSUES

On 19th March, the EU Parliament Research Service published a briefing paper which seeks to take stock of the current state of play; assess the current regulatory framework and the proposals under discussion; and to offer a selection of recommendations.  An initial conclusion is that, while the European Commission has put a considerable amount of work into the modernisation of the EU VAT system, remaining risks of fraud cannot be ignored.  A second substantial conclusion is that a different approach and the use of new technologies would allow the Member States to remove significant obstacles that currently impede an effective fight against VAT fraud.  It lists what it says are the main types of cross-border VAT fraud, including:

  • Missing trader fraud (‘MTIC fraud’) and ‘carousel fraud’;
  • import fraud and more broadly e-commerce related fraud, in the sectors of electronically supplied services, intra-EU distance sales and imports;
  • VAT fraud related to cars;
  • reduced rates fraud; and
  • a new VAT avoidance scheme in the sector of aircraft leasing.

http://www.europarl.europa.eu/cmsdata/156408/VAT%20Fraud%20Study%20publication.pdf

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Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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