EU member states approved legislation during the Economic and Fiscal Affairs Council meeting in Brussels requiring the sharing of VAT information with EU anti-fraud bodies to combat cross-border VAT fraud, with the framework expected to enter force 20 days after publication following a European Parliament vote in July.
Framework Structure
The approved framework provides the European Public Prosecutor's Office (EPPO) and the European Anti-Fraud Office (OLAF) with direct access to VAT data held by member state tax administrations. This mechanism reduces reliance on bilateral information exchanges between member states and enhances coordination between EU bodies and national authorities in investigating suspected VAT fraud across jurisdictions.
The legislation specifically targets cross-border VAT fraud schemes, including carousel fraud operations where traders exploit the VAT exemption for intra-Community supplies through complex chains of transactions across multiple member states.
Development Process
Spain had previously raised concerns regarding legal certainty and the specific wording of provisions related to information sharing protocols and OLAF access procedures. Updated draft language addressing these concerns was subsequently supported during the discussions, clearing the path for approval.
The framework now awaits a European Parliament vote scheduled for July before final adoption.
Context
According to European Commission estimates, cross-border VAT fraud costs EU member states and the EU budget between €12.5 billion and €32.8 billion annually. This data-sharing framework represents a significant step in the EU's broader anti-fraud strategy, moving beyond traditional mutual assistance procedures to create direct investigative access for EU-level enforcement bodies. The measure aligns with ongoing efforts to strengthen VAT compliance mechanisms across the single market.