What was it about

VAT fraud costs the EU and national budgets several billion euro every year. As it follows from the VAT Gap study published by the European Commission in 2014, EU countries lost an estimated €177 billion in VAT revenues due to non-compliance or non-collection during 2012. Despite the fact that unpaid VAT is not only due to fraud, non-compliance remains an important contributor to these financial losses.

There are different types of VAT fraud that can be identified ranging from inflated refund claims, underreported sales, fictitious traders, to a more complex type of fraud which has an international dimension e.g. VAT carousel or missing trader fraud. The latter is regarded as a major cause of lost revenues and poses additional challenge for tax administrations when responding to such complex fraud schemes due to the fact that fraudsters are becoming quicker and cleverer in developing them. To effectively tackle and reduce otherwise irreparable revenue shortfalls administrations are therefore continuously working on ways how they can adjust internal control processes and develop their capacities to react swiftly and effectively to such sudden and complex cases of VAT fraud.

In this regard this course was designed to provide insights into current developments and challenges in VAT administration along with the exchange of information on recent VAT fraud schemes supported by discussions on possible ways of combating them. Participants were also encouraged to reflect on region-specific issues and recommend strategies and initiatives for enhancing effectiveness of VAT administration.

What were the benefits

An important feature of this event were the valuable exchange of ideas and country specific experiences on what tax authorities across SEE can do to deal effectively with more and more sophisticated VAT fraud schemes.

To situate the course program according to the specific needs and expectations participants were encouraged to submit in advance examples of real cases they deal with at their work and were relevant to the course topics. These were then reviewed by the course faculty and provided a useful basis for class discussion.

By the end of the course, participants:

• Received insights into the most recent VAT fraud schemes (national, international – EU and non EU area)
• Gained new insights into how to detect fraudulent companies
• Learned about different measures to reinforce the VAT system
• Discussed possible ways to combat different types of VAT fraud
• Learned by exchange of experiences from other countries

Who was it for

The course has been designed for mid to senior level tax officials who are involved and/or have experience with the prevention, investigation and prosecution of VAT fraud within their institutions.

Participants were expected to take an active part in the workshop activities. The success of the workshop was directly dependent on the participants’ active engagement in the discussions and group work.

Faculty

The course was delivered by Hans van Mierlo and Theo Cornelissen, both from the Dutch Ministry of finance.

Hans van Mierlo, Tax auditor, Tax and Customs administration The Netherlands

Hans is an experienced auditor and has been working at the Dutch tax administration since 1981. After being an auditor from 1990 untill 2007 he started working for the Duch Center for Compliance Risk Management and Intelligence. During this period he was active in different European countries as an advisor on both VAT as intelligence matters, the most intensive in Croatia before this country became a member of the EU.

Partners

This learning initiative was supported by: