On Tuesday 5 May, the European finance ministers reached unanimous agreement on the proposal for a regulation to strengthen cooperation on cross-border VAT fraud between the European Public Prosecutor’s Office (EPPO), the European Anti-Fraud Office (OLAF) and the Eurofisc network, which brings together experts from EU Member States (see EUROPE 13752/16).
“Every year, billions of euros are lost to ‘carousel fraud’”, said the Cypriot minister, Mákis Keravnós. According to figures presented by the EU Council, the annual loss in tax revenue falls within a range of €12.5 and €32.8 billion.
Mr Keravnós clarified that the compromise text prepared by the Cyprus Presidency of the EU Council “in no way alters” the powers of either the European Public Prosecutor’s Office or OLAF, but that “it will facilitate their work in combating VAT fraud”.
During the debate, only Spain and the Czech Republic expressed their support for the proposal on the table, with the Spanish representative welcoming the final adjustments made to two recitals within the text.
European Commissioner for Taxation Wopke Hoekstra noted that the VAT gap, that is, the difference between theoretically expected VAT revenue and the amount actually collected, “still stood at €130 billion” in 2023. Regarding OLAF’s use of tax data, he indicated that the Commission was prepared to address this issue as part of a future revision of the legislative framework for anti-fraud efforts.
Once European Parliament has issued its advisory opinion, the EU Council will adopt the regulation with a view to its application starting in September 2026, or even July 2030 for certain provisions linked to the entry into operation of the ‘VIES’ central VAT information exchange system.
See the Cyprus Presidency’s compromise text: https://aeur.eu/f/ltd (Original version in French by Mathieu Bion)