EU Court of Auditors launches report on VAT fraud

On Monday 24 March, the European Court of Auditors (ECA) will publish a special report looking at whether the EU’s financial interests are sufficiently protected under simplified import customs procedures.

About the topic

Value Added Tax (VAT) is an important source of revenue for national governments and the EU budget. Fraud committed by traders on VAT levied on imports can mean a considerable loss of revenues for both the member states and the EU: the VAT-based own resource makes up to 9.1 % of the EU’s total revenue, and if not all VAT due is collected, the missing amounts must be compensated by other member states’ contributions to the EU budget. Selling goods and services without including the correct VAT in prices also distorts competition in the EU single market.

About the audit

For imported goods, the VAT is due when the good enters the EU customs union, and its amount is established on the basis of the customs declarations. The EU auditors assessed whether the EU’s financial interests and the single market are protected effectively against VAT fraud on imports when simplified import customs procedures – which were born to facilitate trade – are used.