EU to step up fight against VAT fraud


The European Commission has suggested speeding up exchanges of information between member states as a first step to crack down on cross-border VAT fraud, estimated to drain billions from EU governments’ coffers each year.

The proposed measures are “a first step towards a more effective fight against VAT fraud,” said EU taxation Commissioner László Kovács who presented the proposals on Monday (17 March).

The new measures, to be implemented in 2010, are aimed at speeding up the detection of so-called “carousel” VAT fraud where goods and services are bought in one country without paying VAT. The products are then resold in another EU member state with VAT charged, allowing fraudsters to pocket the difference and depriving governments of billions of euros each year.

Under the proposal, the transmission of information between member states on such transactions, which currently takes three to six months to be transmitted, would be cut to just one or two months. And operators making purchases of more than €200,000 per year would have to file a VAT declaration every month.

Kovacs said the advantage of the proposed measures is that they “they can be implemented very quickly and do not impose any significant administrative burdens on economic operators.”

In addition, the Commission said it has made “considerable progress” on opening up access to non-sensitive tax data held by member states as well as on harmonising procedures for the registration of persons liable for VAT “to ensure the swift detection and de-registration of fake taxable persons”.

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