Eurofisc, a network of national officials, will be created in order to identify and fight cases of cross-border VAT fraud.

Eurofisc will act as a watchdog and will issue early warnings on suspected fraud cases. It, in theory, will allow for the fast exchange of information between EU member states and will establish a strategic analysis to allow the relevant authorities to stop fraud at the earliest opportunity.

Combating VAT fraud is a major challenge for the European Union as each year it costs EU governments an astonishing €40 billion.

Fraud relating to VAT is often organised on a cross-border basis, frequently in carousel schemes where goods are traded between numerous operators in different member states whilst failing to pay VAT to the relevant tax authorities.

The Economic and Financial Affairs Council has highlighted the importance for a universal approach in order to make cooperation between tax authorities easier and more effective and to give member states the means to combat VAT fraud more effectively.

Tax authorities in all 27 member states will be given access to information contained in the taxpayers’ databases of other member states.

The draft regulation details:-

  • Cases in which member states must exchange information
  • The procedures for providing feedback on information
  • Situations where member states must perform multilateral controls

 

The Eurofisc network, in which all member states will participate, will allow targeted and speedy action to be taken in order to combat new and specific types of fraud.

It will involve an early warning mechanism and the coordination of both data exchange and the work of liaison officials in acting upon any warnings received.

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

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