The EU Council reached a provisional agreement on 5 May 2026 establishing new rules to strengthen the fight against VAT fraud by improving cooperation between member states, the European Public Prosecutor's Office (EPPO), and the European Anti-Fraud Office (OLAF).

The reform specifically targets cross-border VAT carousel fraud, which causes estimated annual tax losses of €12.5 to €32.8 billion across the EU and frequently involves organized crime networks. Under the new framework, EPPO and OLAF will receive enhanced direct and centralized access to VAT data from key European systems including VIES (VAT Information Exchange System), IOSS (Import One-Stop Shop), CESOP (Central Electronic System of Payment Information), and Eurofisc.

The agreement requires Eurofisc to actively share analysis reports on suspected fraud cases with both investigative bodies. EPPO will continue to handle criminal investigations and prosecutions, while OLAF conducts administrative investigations and provides recommendations to national authorities.

The legislation establishes a clear legal basis for information exchange and provides centralized, targeted access to VAT data while incorporating safeguards to prevent indiscriminate surveillance or data fishing expeditions. The provisional agreement now requires formal approval by the European Parliament and Council before entering into force.

This development represents a significant enhancement of the EU's anti-fraud architecture, addressing longstanding challenges in cross-border VAT enforcement where coordination between national tax authorities and EU-level investigative bodies has been fragmented and legally uncertain.