EU Moves to Tighten the Fight Against VAT Fraud by Strengthening Cooperation Between Investigative Bodies

Summary

• Enhanced data access: EU member states have agreed to give the European Public Prosecutor’s Office (EPPO) and OLAF more direct access to cross‑border VAT data, including information held within Eurofisc, the EU’s anti‑VAT‑fraud network. [consilium.europa.eu]
• Focus on cross‑border fraud: The new rules target missing trader intra‑community (carousel) fraud, which the European Commission estimates costs EU and national budgets €12.5–€32.8 billion per year. [consilium.europa.eu]
• Legislative progress: The measure amends Council Regulation (EU) No 904/2010 and is expected to be formally adopted later in 2026 after the European Parliament delivers its opinion. [consilium.europa.eu]

Article

1. Political agreement at EU level

On 5 May 2026, the Council of the European Union reached a provisional agreement on new rules aimed at strengthening the fight against VAT fraud across the EU. The agreement focuses on improving cooperation and information‑sharing between national tax authorities, the European Public Prosecutor’s Office (EPPO), and the European Anti‑Fraud Office (OLAF). [consilium.europa.eu]

According to the Council, the objective is to ensure that EU investigative bodies have timely, targeted access to VAT‑related data needed to detect and investigate serious cross‑border fraud more efficiently. [consilium.europa.eu]

2. Why the changes are needed

Cross‑border VAT fraud—particularly carousel fraud—remains one of the most damaging forms of tax crime within the EU. Organised criminal groups exploit weaknesses in current information flows to commit fraud affecting both national treasuries and the EU budget. The European Commission estimates annual losses at between €12.5 billion and €32.8 billion. [consilium.europa.eu]

Despite progress in recent years, the Council concluded that authorities still lack sufficiently direct access to information, slowing investigations and allowing fraud schemes to persist longer than necessary. [consilium.europa.eu]

3. What the new framework changes

The agreed framework takes the form of a regulation amending Council Regulation (EU) No 904/2010, which governs administrative cooperation and the fight against VAT fraud. [consilium.europa.eu]

Under the new rules:

• EPPO and OLAF will obtain direct access to key VAT information on cross‑border transactions,
• this includes relevant datasets held by Eurofisc, enabling faster risk analysis and case building, and
• improved coordination between EU and national authorities is expected to shorten investigation timelines and increase enforcement effectiveness. [consilium.europa.eu]

The Council emphasised that these measures will strengthen the EU’s capacity to protect its financial interests while improving fairness for compliant businesses. [consilium.europa.eu]

4. Link with wider EU VAT digitalisation

The new cooperation rules complement earlier EU initiatives, including the agreement reached in March 2025 to make VAT reporting obligations for cross‑border B2B supplies fully digital by 2030. Together, these measures reflect a broader strategy combining digital reporting, data analytics, and enforcement cooperation to close the VAT gap. [consilium.europa.eu]

5. Next steps and timing

Before the regulation can be formally adopted, the European Parliament must issue its opinion, which is currently expected in July 2026. Following adoption, the regulation will enter into force 20 days after publication in the Official Journal of the European Union. [consilium.europa.eu]

Once in force, the new framework will directly apply across all EU member states, requiring no national transposition.

Source: Council of the European Union – “VAT fraud: Council agrees to strengthen cooperation with EU investigative bodies”, press release of 5 May 2026. [consilium.europa.eu]

 

Source: consilium.europa.eu

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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