- Simplified customs rules for VAT collection in the EU are prone to fraud.
- Member States’ controls have serious shortcomings and lack cross-border cooperation.
- VAT must be paid on imports based on customs declarations, with simplified procedures for certain cases.
- Simplified procedures are vulnerable to abuse, with significant value goods at high risk of fraud.
- Auditors found serious shortcomings in controls and significant VAT losses.
- Imported goods were often undervalued, affecting VAT due, especially for items like smartphones and textiles.
- National penalties for fraud vary greatly, with some countries imposing much higher sanctions.
- Cooperation and data sharing between Member States and at the EU level are insufficient.
- In 2022, Member States lost an estimated €89 billion in VAT due to fraud, largely from imports.
- Fraud impacts both Member States and the European budget, with a portion of VAT revenue as EU resources.
- A balance is needed between facilitating trade and protecting financial interests.
Source: ifcreview.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
