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EU to strengthen cross-border cooperation on VAT fraud

08 June 2010, 19:15 CET

EU Finance Ministers today reached an agreement on a draft regulation which will enable EU member states to combine efforts in combating fraud with regard to value-added taxation (VAT).

The main innovation involves the creation of Eurofisc, a network of national officials to detect and combat new cases of cross-border VAT fraud.

Combating VAT fraud represents a major challenge for the EU, as every year it costs member states billions of euros in lost revenues. VAT fraud is often organised on a crossborder basis, in particular so-called carrousel schemes where goods are traded amongst several operators in different member states without paying VAT to the tax authorities.

The Economic and Financial Affairs Council has highlighted the need for a common approach, so as to make cooperation between tax administrations more effective and to give member states the means to combat VAT fraud more effectively.

The draft regulation, which recasts regulation 1798/2003, specifies the cases in which member states must exchange information spontaneously, the procedures for providing feedback on such information and situations in which member states must conduct multilateral controls.

The Eurofisc network, in which all member states will participate, will enable targeted and swift action to be taken in order to combat new and specific types of fraud. It will involve a multilateral early warning mechanism, and the coordination of both data exchange and the work of liaison officials in acting upon warnings received.

The regulation will be adopted without discussion at a forthcoming Council meeting, once the text has been finalised.


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