Written by Pieter Baert.
Value added tax (VAT) is a crucial revenue stream for both EU and national budgets. However, substantial losses resulting from domestic and cross-border VAT fraud make its enforcement an essential priority amid growing financial demands. Fraudsters, who are regularly part of organised criminal networks, exploit weaknesses in the VAT system, causing government revenue losses worth billions of euros.
Over the years, the EU and its Member States have taken a variety of measures to close VAT loopholes, adopting innovative digital tools to facilitate exchange of information and detect and stop fraudulent transactions as fast as possible. Member States have also committed to cooperating more closely, through bodies such as the European Public Prosecutor’s Office and Eurofisc; this has led to the successful dismantling of major VAT fraud networks responsible for billions of euros of damage. While progress has been made, the involvement of multiple actors in combating VAT fraud has raised questions about how to optimise cooperation between these bodies.
European Commissioner for Taxation, Wopke Hoekstra, has been tasked with maintaining ambitious efforts to combat tax fraud in the EU, while the Commissioner for Budget, Piotr Serafin, is leading a review of the EU’s anti-fraud structures with a view to enhancing efficiency and cooperation.
Read the complete briefing on ‘Filling the gap: The EU’s fight against VAT fraud‘ in the Think Tank pages of the European Parliament.
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