European Commission strengthens cooperation of Eurofisc, EPPO and OLAF to combat fraud

The proposal provides a legal basis for the exchange of information and access to VAT data, enhancing the EU's ability to combat fraud against the financial interests of the Union.

The estimated VAT loss attributed to Missing Trader Intra-Community (MTIC) fraud in 2023 ranged between €12.5 billion and €32.8 billion annually. In 2023 alone, Eurofisc detected MTIC fraudulent transactions totaling €12.7 billion, which calculated to approximately €2.5 billion in VAT loss (based on a 20% VAT rate). Even under a conservative estimate of €12.5 billion in VAT losses from MTIC fraud, the €2.5 billion uncovered by Eurofisc highlights a significant gap in detection efforts. This underscores the need for enhanced collaboration among key EU anti-fraud actors—Eurofisc, the European Public Prosecutor’s Office (EPPO), and the European Anti-Fraud Office (OLAF)—to strengthen coordination, close jurisdictional loopholes, and ultimately reduce the financial impact of these schemes on EU budgets.

Currently, the EPPO and OLAF execute their respective tasks to combat fraud at EU level by cooperating bilaterally with tax authorities and through access to VAT information at national level, under different means and conditions. However, this approach does not align with the requirements of investigating cross-border VAT fraud that spans multiple jurisdictions, which demands a coordinated, multilateral strategy to address complex, interconnected schemes. The most recent EPPO investigations spanning more than half of the Member States prove that the EU fight against VAT fraud can only benefit from an EU level access to VAT information. The more swiftly EPPO and OLAF gain a comprehensive EU-wide understanding of the fraud, the faster they can intervene. This proposal addresses these shortcomings, in order to provide to the EPPO and OLAF a direct and streamlined communication with Eurofisc (the European network of national VAT antifraud officials) and a specific, direct and centralised access to relevant VAT information in relation with their respective mandates. 

The proposal will now be submitted to the European Parliament and the Council for adoption. 

Background

VAT fraud in the EU, particularly schemes exploiting the VAT exemption on intra-Community supplies, has long posed a significant threat to public finances and market fairness. One prevalent method is the "Missing Trader Intra-Community" (MTIC) fraud, where unscrupulous actors—often referred to as "Missing Traders"—acquire goods without immediately accounting for VAT and later sell them domestically without remitting the tax to authorities. In more complex "carousel" frauds, goods are cycled through multiple companies across EU countries before being sold again, with the first seller evading VAT and the final buyer falsely claiming VAT refunds for payments that never occurred. 

Another VAT fraud scheme relates to the abuse of simplified procedures during import of goods, namely  Customs Procedure 42, under which traders do not need to pay VAT on their imports when the goods are sold and transferred to a different Member State. VAT is expected to be paid in the destination Member State but instead fraudsters just benefit from the VAT exemption and VAT is not paid in the destination Member State. In practice, the goods either remain untaxed in the member state of importation or are consumed in another member state without accounting for VAT.

These schemes drain billions from EU and national budgets annually, exacerbating the VAT Gap highlighted by the European Commission.

Recent high-profile investigations underscore the scale of the problem. The EPPO’s Midas operation, spanning 17 countries, uncovered €195 million in estimated VAT fraud. Investigation Admiral, announced in November 2022, is considered the biggest VAT fraud ever investigated in the EU spanning across more than 22 Member States with a damage estimated at €2.9 billion. Meanwhile, the Calypso investigation, a joint effort targeting criminal networks flooding the EU with Chinese imports, revealed €700 million in potential losses—over €250 million from evaded customs duties and €450 million in unpaid VAT. OLAF has played a key role in supporting EPPO in the Calypso investigation based on its expertise and tools to analyse trade patterns. Such cross-border fraud demands coordinated action, as perpetrators exploit jurisdictional gaps and fragmented enforcement. The strengthened collaboration between Eurofisc, the European Public Prosecutor’s Office (EPPO), and the European Anti-Fraud Office (OLAF) aims to close these loopholes by enabling real-time information sharing, streamlining cross-border investigations, and ensuring swift prosecution of criminal networks. This unified approach not only safeguards EU finances but also reinforces trust in a level playing field for compliant businesses.

More information

VAT 

VAT Gap

VAT in the Digital Age (ViDA)