EU Commission’s new proposal set to combat VAT fraud in the EU

Chetcuti Cauchi co-authored with Wojciech Gadzala | Published on 12 Jan 2018

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On 30 November 2017 the Commission published a proposal for changes to Regulation (EU) No 904/2010. The document containing the Proposal, titled “Towards a single EU VAT area - Time to act”, presents the measures that are designed to strengthen administrative cooperation in the field of VAT.

According to the Proposal it is estimated that in total about EUR 152 billion was lost in 2015 due to shortcomings in VAT collection, including fraud. In Commission’s view the VAT system has been unable to keep pace with the globalisation and digitalisation of the economy. Its response is to enhance cooperation between EU member states, in particular in the field of information exchange on business and cross-border sales.

Key measures proposed by the Commission include:

-              designing an online system for information sharing within 'Eurofisc', the EU's existing network of anti-fraud experts,

-              enhancing the cooperation between OLAF (European Anti-Fraud Office), Europol and the newly created European Public Prosecutor Office (EPPO),

-              sharing of information on imports from outside the EU between EU member state tax and customs authorities,

-              granting Eurofisc officials access to car registration data from other Member States (to prevent frauds where new cars are sold as used ones to pay lower VAT).

The Proposal has been submitted to the European Parliament for consultation and to the Council for adoption.

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