European Commission welcomes Court of Auditor’s special report on VAT fraud

The European Commission has welcomed the European Court of Auditors' (ECA) special report on Value Added Tax (VAT) fraud on imports, which highlights the need for improved protection of the EU's financial interests. The report emphasizes the importance of addressing VAT fraud, particularly in the context of simplified import customs procedures. In its response, the Commission acknowledges the significance of the issue and outlines the measures it has taken to combat VAT fraud, including amendments to the legislative framework and the introduction of new tools and instruments, such as the Import One Stop Shop (IOSS) scheme, and further highlights its proposal on VAT in the Digital Age (ViDA), which includes improvements to the IOSS system, such as empowering the Commission to introduce special measures to prevent tax evasion or avoidance.

The Commission agrees with the ECA's recommendations to strengthen the regulatory framework for simplified import customs procedures, conduct an in-depth analysis of the regulatory framework and its implementation, and enhance cooperation between tax and customs authorities. The Commission will assess whether the introduction of standardised rules for the appointment of a tax representative could be included in the VAT beyond ViDA workstream, ensure a faster invalidation of VAT numbers misused by fraudsters and will assess and promote good practises identified in the report with regard to the systematic request of the evidence that the imported goods are intended to be transported or dispatched from the Member State of importation to another Member State.

In addition, the Commission’s Customs Reform proposal aims to create a more robust and efficient customs framework, including the establishment of an EU Customs Authority which will operate an EU Customs Data Hub where companies will provide data once rather than submitting data to each customs authority. The proposal is set to enhance the interaction between customs and VAT, enabling a more effective exchange of information and coordination between the two. These efforts will contribute to identifying and fighting VAT fraud. This will be one step forward in ensuring a level playing field for businesses and protecting the EU's revenue. The Commission will continue to monitor the situation. The goal is to create a fair and competitive business environment, where companies can thrive, and fraudulent activities are prevented.

The Commission is committed to working closely with Member States to implement these measures and to continue monitoring and analyzing the regulatory framework and its implementation. By strengthening the EU's tax framework and improving cooperation between tax and customs authorities, the Commission aims to better protect the EU's financial interests and ensure a fair and competitive business environment.

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• Special report 08/2025: Value Added Tax fraud on imports