- EU auditors report that import customs procedures are insufficient to prevent VAT fraud.
- VAT is due when goods enter the EU customs union, based on customs declarations.
- Simplified import customs procedures are vulnerable to VAT fraud.
- Two risky procedures are CP42 and IOSS, which exempt VAT under certain conditions.
- The value of imported goods under these procedures is estimated at €260 billion between 2021 and 2023.
- Significant losses in VAT collection were found in the audit sample.
- The EU VAT compliance gap was €89.3 billion in 2022, a 7 percent gap.
- The Commission lacks specific data to estimate VAT fraud under simplified procedures.
- The ECA may consider a total VAT audit in the future.
- Existing measures are insufficient to prevent VAT import fraud.
- A balance is needed between trade facilitation and protecting EU financial interests.
Source: brusselstimes.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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