On combating VAT fraud – the effectiveness of cross-border cooperation when it comes to VAT fraud and its impact on the EU budget

–having regard to the own-initiative procedure it launched on 22 January 2026 on the protection of the Union’s financial interests in the post-2027 multiannual financial framework through the revision of the anti-fraud architecture (2026/2006(INI)),

–having regard to Rule 55 of its Rules of Procedure,

–having regard to the report of the Committee on Budgetary Control (A10-0000/2026),

A.whereas missing trader intra-community (MTIC) fraud, commonly known as ‘carousel fraud’, is one of the most severe, structurally embedded threats to the integrity of the EU’s own resources;

B.whereas the effective detection and prosecution of carousel schemes is dependent upon swift, structured and operationally effective cooperation among Member State tax administrations, law enforcement agencies, and EU-level anti-fraud bodies;

C.whereas the 2025 VAT Gap Report estimates an EU-wide VAT compliance gap of EUR 128 billion; whereas carousel fraud is estimated to cost the EU between EUR 12.5 billion and EUR 32.8 billion annually;

D.whereas the EPPO’s 2025 annual report reveals that revenue fraud, which exceeds EUR 45 billion, accounts for over 67 % of the total estimated damage in all active investigations; whereas organised criminal groups have brought carousel schemes to a mass-production level across multiple Member States, and were responsible for 86 % of damage in organised crime cases;

E.whereas ECA Special Report 26/2025 found that, while OLAF, the EPPO, Europol and Eurojust have clearly defined and non-overlapping mandates, persistent weaknesses in cross-body information exchange are materially affecting the number and timeliness of investigations; whereas the ECA also found that the Commission lacks adequate oversight mechanisms to verify whether the full recovery of amounts has in fact taken place following court orders; whereas Parliament’s PIF resolutions have consistently demanded stronger recovery reporting and urgently called for the Commission to provide measurable data in accounting reports focused on tangible results;

F.whereas the AFA review opened a structured review process engaging OLAF, the EPPO, Europol, Eurojust, Eurofisc, the Authority for Anti-Money Laundering and Countering the Financing of Terrorism and the proposed EU customs authority; whereas the Commission has confirmed that the AFA review is designed to build the legislative architecture of the post-2027 multiannual financial framework (MFF) as regards the protection of the EU’s financial interests;

G.whereas it insists that anti-fraud conditionality, access for the EU’s anti-fraud architecture components to relevant information for investigative and prosecutorial reasons, strong anti-fraud coordination service (AFCOS) obligations and coordinated national anti-fraud strategies, and strong recovery mechanisms must all be embedded as horizontal requirements in the MFF sectoral regulations, the Financial Regulation2, and the specific instruments governing the EU’s anti-fraud architecture;

H.whereas Eurofisc, a multilateral network of Member State tax liaison officials, has proven effective as a decentralised early-warning mechanism; whereas its transaction network analysis (TNA) tool generates actionable intelligence on suspicious cross-border VAT chains; whereas under the Commission proposal to amend Council Regulation (EU) No 904/2010, the EPPO and OLAF would be granted direct, centralised access to the VAT Information Exchange System (VIES) and Eurofisc, within their respective mandates and subject to data protection safeguards as noted by the European Data Protection Supervisor;

I.whereas, in addition to carousel fraud, import VAT fraud – in particular, the fraudulent misuse of Customs Procedure 42 and the Import One-Stop Shop – constitutes a significant and growing source of revenue loss; whereas ECA Special Report 08/2025 identified systemic vulnerabilities enabling non-EU operators to exploit these mechanisms; whereas, with regard to the Commission proposal to amend Council Regulation (EU) No 904/2010, Parliament has called for effective cooperation and exchanges among customs and VAT authorities in order to allow timely and comprehensive cross-checking of the relevant information on customs operation and VAT declarations;

J.whereas the ViDA package requires e-invoicing and real-time digital reporting to be introduced for intra-Community business-to-business transactions by 2030;

K.whereas the AFCOS established in each Member State in line with Article 12(a) of the OLAF Regulation3 currently serve as the primary national interface for cooperation with OLAF and the EU’s anti-fraud architecture (AFA) internal layer; whereas the effectiveness of AFCOS varies significantly across Member States; whereas the revision of their role is expected to be tackled as part of the revision of the OLAF Regulation;

VAT Anti-Fraud in the Post-2027 MFF

1.Reaffirms its calls highlighting the need for coordinated EU-level action against cross-border VAT fraud and for Member States to strengthen administrative cooperation and to operationalise the multilateral early-warning system for carousel fraud, and its calls for the Commission to reconsider lowering the EUR 10 million threshold under Article 2 of the PIF Directive, where individual national damage may fall below the threshold while aggregate EU-wide damage is substantial; reiterates that the AFA needs to be strengthened for the post-2027 MFF and that the EPPO and OLAF need to find effective solutions to exercise their mandate over serious cross-border VAT offences; reiterates that carousel fraud cases have intensified with the wider involvement of organised criminal networks, requiring increased exchanges and better coordination among the AFA components;

2.Considers that the legislative instruments addressed in this resolution aim to build the essential anti-fraud infrastructure of the post-2027 MFF; stresses that the next MFF and its sectoral regulations must ensure robust and operationally effective anti-fraud provisions, including in the field of VAT protection;

3.Is concerned about the widespread use of financing not linked to costs for a substantial portion of programmes under the next MFF and warns that without appropriate and adequate safeguards, this approach entails substantial risks to the protection of the EU’s financial interests;

4.Stresses, therefore, the importance of the EU AFA in the context of the post-2027 MFF and encourages the EU institutions, offices and bodies to step up their cooperation, particularly in terms of exchanging information on criminal / fraudulent activities in relation to EU funds and providing one another with access to their data; recalls the importance of coordination and better cooperation with the judicial and police authorities of the Member States in order to combat VAT fraud;

5.Calls on the Commission, in this regard, to: (i) create a common governance framework to coordinate all anti-fraud actors; (ii) implement a unified reporting system to consolidate the available information; and (iii) promote greater use of digital tools to improve data collection, exchange and analysis;

Cross-border cooperation – closing the information gap

6.Stresses that granting the EPPO and OLAF direct, automated and centralised access to VIES, Eurofisc and the Central Electronic System of Payment Information is essential for ensuring the effective countering of cross-border carousel fraud; calls on the Commission to issue clear procedural guidelines to the relevant bodies to ensure legal certainty and to prevent any obstacle to an effective, and where appropriate, simultaneous deployment of the administrative and criminal investigation tools; insists that the amended Regulation (EU) No 904/2010, if adopted, must be implemented with full respect for the distinct legal frameworks applicable to OLAF’s administrative mandate and EPPO’s criminal enforcement mandate, in line with the European Data Protection Supervisor’s Opinion 1/2026 of 7 January 2026;

7.Emphasises that cross-border cooperation on VAT fraud requires not only data exchange at EU level, but also robust bilateral and multilateral cooperation mechanisms among the Member States’ tax administrations;

8.Calls on the Commission to support actions aiming to reinforce the operational effectiveness of Eurofisc; insists that Eurofisc’s TNA tool should be further developed with AI-assisted pattern recognition capabilities, enabling real-time cross-border detection of suspicious VAT transaction chains; invites the Member States to strengthen their mutual cooperation within Eurofisc and ensure the timely and complete provision of transactional data;

9.Stresses the importance of verifying VAT registration applications effectively; considers that addressing the moment of creation of the missing trader is the most structurally effective and cost-efficient intervention point in the carousel fraud cycle;

10.Acknowledges that the Reverse Charge Mechanism, as provided for under Articles 199a and 199b of the VAT Directive4, has demonstrated clear effectiveness as a targeted anti-fraud instrument by removing the structural opportunity for missing traders to collect VAT and disappear before remitting it; stresses that the mechanism should be retained and, where appropriate, extended; calls on the Commission to bring forward in good time a proposal to extend and, where the evidence warrants, to broaden the scope of Articles 199a and 199b beyond 2026;

11.Notes with concern that crypto-asset transactions are increasingly used by organised criminal networks as a layering mechanism for the proceeds of VAT carousel fraud, exploiting the pseudonymity and cross-border transferability of crypto assets to rapidly move and conceal fraudulent gains before detection; welcomes the entry into force of Council Directive (EU) 2023/22265 (DAC8), which requires crypto-asset service providers to report crypto-asset transaction data to national tax authorities from 2026 onwards; calls on the Commission to ensure, as part of the AFA review, that DAC8 reporting data is accessible to Eurofisc, OLAF and EPPO under their respective mandates for the purposes of VAT fraud investigation; calls on the Commission to assess the extent to which data reported by crypto-asset service providers has helped to identify VAT fraud proceeds and to report its findings to Parliament and the Council by 2028;

12.Calls on the Commission to conduct a pre-emptive vulnerability assessment of the risk of VAT carousel fraud and financial crime affecting carbon credit and allowance transactions under the EU Emissions Trading System Phase 2 (ETS2) and postpone the operational launch of ETS2 if there is a high risk of such crimes; recalls that the original EU ETS was the vehicle for one of the largest carousel fraud schemes in EU history, leading to estimated losses of approximately EUR 5 billion between 2008 and 2009, and that those schemes were only dismantled after the damage had already occurred; insists that the Commission must identify and address structural vulnerabilities in the ETS2 transaction architecture before the system becomes operational; calls on the Commission to communicate the findings of this assessment to Parliament and the Council and to include in the ETS2 operational rules any safeguards identified as necessary;

13.Calls on the Commission to ensure, in the technical implementation framework of the ViDA package, that the real-time digital reporting data generated under the mandatory e-invoicing and digital reporting obligations is technically interoperable with Eurofisc’s TNA tool and accessible, under their respective mandates and subject to applicable data protection rules, to OLAF and the EPPO for the purposes of cross-border VAT fraud detection; calls on the Commission to report to Parliament and the Council by 31 December 2031 on the operational results of ViDA data use in cross-border VAT fraud detection cases, including the number of cases opened, the estimated damage identified, and the amounts recovered;

Reforming the EU AFA

14.Welcomes the Commission’s AFA review as a timely and comprehensive initiative to map the existing architecture, identify loopholes and promote coherence across the entire anti-fraud cycle; underlines that this review is an opportunity to establish a genuinely integrated EU anti-fraud framework in time for the post-2027 MFF;

15.Calls on the Commission to ensure that the 2026 communication resulting from the AFA review is accompanied by a concrete legislative package covering the justifiably expected revisions of the OLAF Regulation and of the EPPO Regulation6 and, where appropriate, consistent further amending of the Europol Regulation7, the Eurojust Regulation8, Eurofisc’s governance framework, and the PIF Directive; stresses that Parliament expects the AFA review to result in agreed-upon binding legislative change, not merely coordination guidelines;

16.Stresses that the AFA revision must ensure adequate reporting channels, clear terms and uniform modalities on measures and actions adopted to protect revenue and the VAT-based own resource, presenting clear data and figures about the results achieved and their impact on the EU’s budget, in such a way as to allow a clear understanding of what the AFA has accomplished against the intended objectives and the invested resources;

17.Urges the Commission to use the AFA review to address the governance deficit identified by ECA Special Report 26/2025, the lack of accountability and the missing wider overview of the strategies and priorities of the individual components; calls for the establishment of structured, regular reporting on follow-up actions taken in response to OLAF recommendations and judgments in EPPO cases;

18.Considers that the AFA review must produce a clearer architecture so OLAF’s administrative investigation function can complement the EPPO’s criminal prosecution mandate; notes with concern that less than 1 % of reports to the EPPO originate from OLAF; insists that the forthcoming AFA legislative package must implement genuine complementarity between OLAF and the EPPO through legally binding information-sharing protocols and automatic referral triggers and include reporting obligations on this specific matter to Parliament and the Council;

The AFA components – OLAF Regulation

19.Calls on the Commission to present targeted amendments to the OLAF Regulation to strengthen the role of the AFCOS; insists that the minimum common functions of the AFCOS must be clearly defined in the regulation, including their cooperation with OLAF at all stages of the investigative life cycle, and the provision of timely information on the follow-up actions taken in response to OLAF’s recommendations;

20.Considers that the current OLAF mandate should be assessed for its adequacy in respect of cross-border VAT-related investigations and, in this regard, calls on the Commission to evaluate whether the OLAF Regulation should be clarified or amended to remove any ambiguity about OLAF’s competence in relation to VAT fraud affecting the EU budget;

21.Expects the AFA legislative package to introduce measures that aim to ensure adequate follow-up on OLAF recommendations, including a strengthened ‘Comply or Explain’ mechanism for both national authorities and Commission services, asking them either to execute OLAF’s recommendations on financial recovery within a reasonable time period or to provide a justification;

22.Calls on the Commission to report regularly to Parliament and the Council on the implementation rate of OLAF’s recommendations, including in VAT-related cases;

The AFA components – EPPO Regulation and the PIF Directive

23.Reiterates its long-standing call for the Commission to assess whether the EUR 10 million threshold under Article 2 of the PIF Directive should be lowered, because it may fail to capture MTIC schemes structured across multiple Member States, and, if appropriate, to propose an amendment addressing this issue;

24.Is aware of the important role the EPPO plays in protecting the EU’s financial interests; believes that the ongoing revision of the EPPO Regulation should confirm the EPPO’s mandate, allowing for the necessary focus on the criminal misconduct that affects the EU’s budget, and calls for steps to ensure that the EPPO, within its operational capacity, is able to handle complex, multi-jurisdictional VAT carousel investigations;

25.Stresses that the revision of the EPPO Regulation is expected to address the essential issue of recovering EU resources that have been affected by fraud and other criminal misconduct and have been seized and confiscated following the EPPO’s interventions; points out that Article 38 of the EPPO Regulation states that the treatment of confiscated assets is governed by national law and that when an EPPO investigation results in a final confiscation order, the assets or seized amounts are handled according to the procedures and domestic laws of the Member State concerned;

26.Understands and agrees upon the current discipline, according to which once a final judgment is rendered the standard domestic asset-disposal procedures apply; notes that, accordingly, there is currently no established domestic or European legal mechanism that obliges a Member State to route confiscated criminal cash directly into the EU budget and when a national court issues a final confiscation order in an EPPO-led case, the funds legally default to the national treasury or national budget of that Member State;

27.Notes that the recovered amounts that are routed to the EU’s budget following their seizure by the EPPO and confiscation by national courts is limited; underlines that the final recovery of lost funds technically falls outside the EPPO’s operational mandate, and that the EPPO’s remit ends once a conviction and confiscation order are secured; believes that a specific provision should be added to clarify roles and responsibilities, taking into account the need to involve EU authorities in the recovery process, without prejudice to the legitimate rights and expectations of the parties involved and who suffered damage; maintains that the budgetary and discharge authority needs to fully understand the financial impact of the confiscations and their execution;

The AFA components – Europol Regulation

28.Welcomes the ongoing structural evolution in Europol’s operational role and calls for the revision of the Europol Regulation to expand Europol’s analytical and support mandate in VAT fraud cases;

29.Asks that Europol be granted the legal capacity to formally propose to the EPPO and national competent authorities the opening of cross-border investigations in VAT fraud when its big-data analysis identifies evidence of systematic cross-border criminal networks; insists that Europol’s AI-assisted financial intelligence tools should be fully deployed in support of Eurofisc’s TNA activities for VAT-related matters, and in favour of all the AFA operations where useful and appropriate;

The AFA components – Eurojust Regulation

30.Calls on the Commission to include in the revision of the Eurojust Regulation provisions that reinforce Eurojust’s coordination role in complex, multi-jurisdictional VAT fraud cases; proposes that dedicated operational coordination capacity be created within Eurojust for VAT fraud cases;

31.Insists that the revised Eurojust Regulation must strengthen judicial cooperation in asset freezing and evidence-gathering; stresses that Eurojust’s network of judicial contact points must be fully operational for executing European investigation orders in VAT fraud investigations;

Recovery of amounts affected by fraud

32.Stresses that deterrence and the effective protection of the EU’s financial interests require not only the investigation and prosecution of VAT fraud but also the actual recovery of amounts fraudulently diverted; deplores the persistent fragmentation and low efficiency of recovery processes, as highlighted by ECA Special Report 26/2025 and OLAF’s annual reports; notes that Parliament has repeatedly urged, in its resolutions on the protection of the EU’s financial interests, the Commission to conduct stronger recovery reporting, but has not obtained satisfactory results;

33.Calls on the Commission to create a structured monitoring mechanism on the follow-up actions taken in response to EPPO convictions and OLAF administrative recommendations in VAT-related cases, specifying the amounts actually recovered versus the amounts recommended for recovery, and asks that it report annually to Parliament and the Council on this matter;

Import VAT fraud and the nexus with customs fraud

34.Notes with concern the findings of ECA Special Report 08/2025 on VAT fraud on imports, which identified systemic failures in the enforcement of VAT obligations upon importation; stresses that fraudulent under-declaration of customs value, the misuse of VAT exemptions upon importation, and the infiltration of e-commerce flows from non-EU countries constitute a growing vector of revenue loss that is closely interconnected with intra-Community VAT fraud;

35.Calls on the Commission to address, in the AFA legislative package, the vulnerabilities identified in Customs Procedures 42 and the Import One-Stop Shop; insists that the technical architecture governing the EU customs data hub must be designed, from the outset, to ensure full real-time interoperability with Eurofisc’s TNA tool and with the investigative systems of OLAF and the EPPO under their respective mandates; calls on the Commission to ensure the automated cross-referencing of customs declaration data against VAT registration records in VIES and against Eurofisc risk indicators;

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36.Instructs its President to forward this resolution to the Council, the Commission, the European Court of Auditors, the European Public Prosecutor’s Office, the European Anti-Fraud Office (OLAF), the European Union Agency for Law Enforcement Cooperation (Europol), the European Union Agency for Criminal Justice Cooperation (Eurojust), and the governments and parliaments of the Member States.