The Council of the European Union has reached a provisional agreement on new rules aimed at reinforcing cooperation in the fight against VAT fraud across the European Union.
The initiative focuses on enhancing collaboration between Member States and key EU investigative authorities, including the European Public Prosecutor’s Office and the European Anti-Fraud Office.
Direct access to cross-border VAT data
A central feature of the new framework is granting EPPO and OLAF direct access to VAT data on cross-border transactions, including information held within Eurofisc.
This marks a significant shift in enforcement capabilities, enabling:
- Faster identification of suspicious transaction chains
- Improved data sharing between tax authorities and investigative bodies
- More efficient support for ongoing investigations into VAT fraud
Focus on MTIC and carousel fraud
The reform specifically targets missing trader intra-community (MTIC) fraud, also known as carousel fraud, which remains one of the most significant forms of VAT fraud in the EU.
According to the European Commission, cross-border VAT fraud results in estimated losses of €12.5 billion to €32.8 billion annually, often involving highly structured and organized criminal networks.
The enhanced access to transaction-level data is expected to strengthen the EU’s ability to:
- Detect complex fraud schemes earlier
- Trace fraudulent supply chains across multiple jurisdictions
- Increase prosecution success rates
Strengthening EU-wide coordination
The new rules aim to improve coordination between national tax administrations and EU-level investigative bodies.
With more streamlined access to information:
- EPPO will be better equipped to initiate and conduct criminal investigations
- OLAF will enhance its administrative investigative capabilities
- Member States will benefit from more coordinated enforcement actions
This integrated approach is expected to reduce delays and improve the overall effectiveness of VAT fraud detection and enforcement.
Impact on businesses and compliance
For businesses operating across the EU, the new framework reinforces the importance of:
- Accurate and consistent VAT reporting
- Robust transaction documentation
- Strong internal controls over cross-border operations
The increased data transparency and inter-agency cooperation may lead to:
- More targeted audits
- Faster detection of anomalies
- Greater scrutiny of intra-community transactions
At the same time, the measures are designed to support a level playing field, reducing competitive distortions caused by fraudulent operators.
Alignment with digital VAT reporting
The reform complements broader EU initiatives aimed at modernizing VAT compliance, including the transition toward fully digital VAT reporting obligations by 2030.
This alignment reflects a wider policy trend toward:
- Real-time or near real-time data reporting
- Increased reliance on data analytics and risk assessment tools
- Greater integration between tax compliance systems and enforcement mechanisms
Legislative process and next steps
The European Parliament is expected to deliver its opinion on the proposal by July 2026.
Following this step:
- The Council will proceed with formal adoption
- The regulation will enter into force 20 days after publication in the Official Journal of the European Union
The legal basis of the reform is an amendment to Council Regulation 904/2010 on administrative cooperation and combating VAT fraud, further strengthening the EU’s legal framework for VAT enforcement.