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The EU Self-Surplus Puzzle: An Indication of VAT Fraud?

The EU has a trade surplus of 307 billion euros with itself, but if all imports and exports were correctly recorded, this would have to be zero. Measurement errors alone cannot explain this systematic deviation. Rather, massive sales tax fraud seems to be a cause that costs the EU countries 30 to 60 billion euros per year. This is shown by a data analysis by the Kiel Institute for the World Economy (IfW Kiel) and the Ifo Institute in Munich.

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