- VAT carousel fraud is a complex scheme used by criminal networks to fraudulently exploit Government VAT revenues.
- It involves exploiting the VAT Directive mechanism for cross-border transactions, resulting in significant revenue losses for Member States.
- The fraud typically involves high-value, easily transportable goods and is facilitated by countries with online banking facilities, money laundering expertise, and low international cooperation.
- The laundered money is often used for cash withdrawals, casino transactions, luxury goods, or converted to cryptocurrency.
- Red flags for identifying potential fraud include rapid business growth, repeat transactions at consistent profit margins, shell companies, complex ownership structures, and unexplained company closures.
Source Zampa Debattista
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