EU Auditors Warn Simplified Customs Procedures Insufficient to Combat VAT Fraud Effectively

• EU auditors report weaknesses in handling VAT fraud on imports with simplified customs procedures.
• High-risk procedures include Release for free circulation CP42 and Import One-Stop Shop IOSS.
• €260 billion worth of goods imported under these schemes from 2021 to 2023.
• Regulatory loopholes and inconsistencies found, such as lack of harmonised rules and disparities in sanctions.
• Inadequate checks by Member States lead to significant VAT losses.
• Common fraud tactics include undervaluation of products like smartphones, textiles, and jewellery.
• Weak enforcement of VAT exemption conditions noted.
• Data-sharing issues persist between tax and customs administrations.
• Legislative reforms are in progress, but stricter enforcement and cooperation needed.
• European Commission agrees with recommendations and outlines steps taken to enhance fraud prevention.

Source: etaf.tax

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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