The EU said it had tracked down international tax fraud worth around €2.2 billion with the help of a team of more than 600 people, according to the European Public Prosecutor’s Office (EPPO).
Raids took place in 14 countries, including Germany, Spain and France, on 29 Nov 2022. Investigators uncovered a network of “criminal activities” in 26 of the 27 EU member states: Activities were proven in Albania, China, Mauritius, but also in the United Arab Emirates (UAE) as well as in the USA.
The first investigations were undertaken by the European Public Prosecutor’s Office in spring 2021, after Portuguese authorities had called them in. It was triggered by a company based in Coimbra, central Portugal, which sold mobile phones and other electrical goods and was suspected of VAT fraud.
Upon further investigation, the EPPO, Europol and national authorities uncovered a widespread fraud scheme involving more than 9,000 companies.
This chain included companies that acted as suppliers of electronic equipment and others that sold this equipment online while claiming VAT refunds from national authorities, before transferring this revenue abroad and disappearing.
This is how the criminals worked:
This so-called VAT carousel costs the European Union almost 50 billion euros a year, according to Europol estimates. Several companies are involved in this fraud, which are based in at least two EU member states.
This is how the estimated damage of 2.2 billion euros came about: