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Commission to stiffen anti-VAT fraud system

[ December 5, 2017   //   ]

The European Commission revealed new tools to make the EU’s VAT system more fraud-proof and close loopholes on 30 November, including measures to prevent facilitation measures being exploited by criminals.

Currently, goods that arrive from outside the EU with a final destination of one member state can arrive into the EU via another member state and transit onwards VAT-free. VAT is then only charged when the goods reach their final destination.

However, the system can be abused to divert goods to the black market and circumvent the payment of VAT. Under the new rules information on incoming goods would be shared and cooperation strengthened between tax and customs authorities in all Member States.

The legislation would also include putting in place an online system for information sharing within ‘Eurofisc’, the EU’s existing network of anti-fraud experts. Joint audits would allow officials from two or more national tax authorities to form a single audit team to combat fraud – especially important for cases of fraud in the e-commerce sector. New powers would also be given to Eurofisc to coordinate cross-border investigations.