2024: €13bn VAT fraud investigations European Public Prosecutor’s Office
The European Public Prosecutor’s (EPPO) office 2024 report has revealed over half of EU budgetary losses it investigated were down to VAT fraud. The latest European Union VAT Gap is estimated at €89 billion for 2022.
EPPO is the independent public prosecution office of the European Union. It is responsible for investigating, prosecuting and bringing to judgment crimes against the financial interests of the EU.
53% of EU budget losses down to VAT fraud
EPPO identified fraud by highly-organised crime gangs focussing on cross-border missing trader fraud on . “Traditional carousel fraud is being replaced by more fragmented linear fraud schemes, where VAT is stolen directly from customers instead of being claimed as refunds from tax authorities.”
By 31 December 2024, EPPO had 2,666 active investigations, for estimated damage of over €24.8 billion. With estimated damage of €13.15 billion, VAT fraud accounted for more than 53% of the overall estimated damage under investigation at the end of 2024.
Fraudster are targeting second hand cars, mobile phones, headphones, hard drives, rare metals, luxury products, fuel products, polymers, and software licences. Fraudulent practices include:
- carousel fraud;
- fraudulent reduction of profit margin taxation;
- cross-invoicing with artificial VAT credits;
- e-commerce fraud;
- use of “paper mill” companies (which issue fraudulent invoices for fake services); and
- abuse of customs VAT deferment, the report says.
