Changes from report parliamentary committee draft to plenary report

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

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

(2025/2121(INI))

The European Parliament,

Changed– having regard to Articles 310(6) and 325(5) of the Treaty on the Functioning of the European Union (TFEU),Union,

Changed– having regard to Article 4(3) of the Treaty on European Union (TEU),Union,

Added– having regard to Council Regulation (EU) 2017/1939 of 12 October 2017 implementing enhanced cooperation on the establishment of the European Public Prosecutor’s Office (‘the EPPO’)1 (EPPO Regulation), and the ongoing revision thereof,

Added– having regard to Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council of 11 September 2013 concerning investigations conducted by the European Anti-Fraud Office (OLAF) and repealing Regulation (EC) No 1073/1999 of the European Parliament and of the Council and Council Regulation (Euratom) No 1074/19992 (OLAF Regulation), and the forthcoming evaluation report on the application and impact of the OLAF Regulation to be submitted by the Commission,

Added– having regard to Regulation (EU) 2016/794 of the European Parliament and of the Council of 11 May 2016 on the European Union Agency for Law Enforcement Cooperation (Europol) and replacing and repealing Council Decisions 2009/371/JHA, 2009/934/JHA, 2009/935/JHA, 2009/936/JHA and 2009/968/JHA3 (Europol Regulation), and the ongoing revision thereof,

Added– having regard to Regulation (EU) 2018/1727 of the European Parliament and of the Council of 14 November 2018 on the European Union Agency for Criminal Justice Cooperation (Eurojust), and replacing and repealing Council Decision 2002/187/JHA4 (Eurojust Regulation), and the ongoing revision thereof,

Added– having regard to Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud to the Union’s financial interests by means of criminal law5 (PIF Directive),

Added– having regard to the VAT in the Digital Age (ViDA) package, formally adopted on 11 March 2025,

– having regard to the Commission proposal of 14 November 2025 for a Council regulation amending Regulation (EU) No 904/2010 as regards the access of the European Public Prosecutor’s Office (EPPO) and the European Anti-Fraud Office (OLAF) to value added tax information at Union level (COM(2025)0685),

– having regard to the Commission white paper of 16 July 2025 for the Anti-fraud Architecture Review (COM(2025)0546) (AFA review),

Removed– having regard to Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud to the Union’s financial interests by means of criminal law1 (PIF Directive),

Added– having regard to European Court of Auditors (ECA) Special Report 03/2024 of 22 February 2024 entitled ‘The rule of law in the EU – An improved framework to protect the EU’s financial interests, but risks remain’,

Removed– having regard to the VAT in the Digital Age (ViDA) package, formally adopted on 11 March 2025,

Added– having regard to ECA Special Report 08/2025 of 24 March 2025 entitled ‘Value Added Tax fraud on imports – The EU’s financial interests are insufficiently protected under simplified import customs procedures’ and Special Report 26/2025 of 15 December 2025 entitled ‘EU bodies fighting fraud – Clear mandates but exchange of information and Commission oversight remain insufficient’,

Added– having regard to the Commission report of 25 July 2025 entitled ‘36th Annual Report on the protection of the European Union’s financial interests and the fight against fraud – 2024’ (COM(2025)0426),

Added– having regard to the Commission communication of 8 July 2025 entitled ‘2025 Rule of Law Report – The rule of law situation in the European Union’ (COM(2025)0900),

– having regard to the Commission report of 11 December 2025 entitled ‘VAT gap in Europe – report 2025’,

Removed– having regard to the European Court of Auditors (ECA) Special Report 08/2025 of 24 March 2025 entitled ‘Value Added Tax fraud on imports – The EU’s financial interests are insufficiently protected under simplified import customs procedures’ and Special Report 26/2025 of 15 December 2025 entitled ‘EU bodies fighting fraud – Clear mandates but exchange of information and Commission oversight remain insufficient’,

Added– having regard to the EPPO Annual Report 2025 of March 2026 and the OLAF Report 2025 of April 2026,

▸4 unchanged paragraphs

– having regard to Opinion 1/2026 of 7 January 2026 of the European Data Protection Supervisor on the Proposal for a Regulation amending Regulation (EU) No 904/2010 as regards access of the EPPO and OLAF to VAT information, which supported targeted VAT data access while stressing the need to preserve the distinct legal regimes applicable to administrative and criminal enforcement,

– having regard to the report of its Committee on Budgetary Control of 30 March 2026 on the protection of the European Union’s financial interests – combating fraud – annual report 2024,

– 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,

Changed– having regard to the report of the Committee on Budgetary Control (A10-0000/2026),(A10-0213/2026),

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;

Change 1

AddedB. whereas the European Delegated Prosecutors, whose contribution is crucial to counter cross-border VAT fraud effectively, are embedded in the national justice systems of the Member States that participate in the EPPO, and the independence and capacity of those national judiciaries is therefore relevant for the effectiveness of the safeguarding of the EU’s own resources; whereas rule of law deficiencies present risks for the EU’s financial interests since their protection relies on an independent judiciary and autonomous anti-fraud and anti-corruption bodies;

AddedC. whereas VAT remains a fiscal cornerstone of the EU Member States, accounting for approximately one fifth of all national revenues, and of the Union, contributing around 15 %, or EUR 23 billion, of the EU budget in 2024; whereas revenue losses resulting from domestic or cross-border fraud therefore pose a budgetary challenge at both national and EU level, while distorting the level playing field for businesses in the single market;

D. 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;

E. 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;

F. 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;

Change 2

ChangedE.G. 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 on the protection of the Union’s financial interests (PIF) have consistently demanded stronger recovery reporting and urgently called for the Commission to provide measurable data in accounting reports focused on tangible results; whereas the ECA has also identified serious weaknesses in the Member States’ VAT systems, such as limited credibility checks and errors in customs declaration systems, resulting in Member States not being able to properly collect VAT;

Change 3

ChangedF.H. 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 (AMLA) 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;

Change 4

ChangedG.I. whereas it insists that compliance with anti-fraud conditionality,rules, access for the EU’s anti-fraud architecture (AFA) 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,Regulation6, and the specific instruments governing the EU’s anti-fraud architecture;AFA;

Change 5

RemovedH. 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;

AddedJ. whereas the detection of complex cross-border VAT fraud also relies on whistleblowers and investigative journalists, as reflected by the fact that the large majority of crime reports processed by the EPPO originate from private parties rather than institutions; whereas the effective protection of reporting persons under Directive (EU) 2019/19377 is therefore an integral part of the EU’s AFA;

AddedK. 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 general agreement to amend Council Regulation (EU) No 904/2010 reached in May 2026, the EPPO and OLAF would be granted direct, centralised access to the VAT Information Exchange System (VIES), within their respective mandates and subject to data protection safeguards as noted by the European Data Protection Supervisor;

L. 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;

Change 6

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

AddedM. whereas disparities in the levels of administrative sanctions applied by Member States in respect of VAT fraud on imports, create conditions that enable operators to exploit the jurisdiction with the lowest penalties;

RemovedK. 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;

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

RemovedVAT Anti-Fraud in the Post-2027 MFF

AddedO. whereas the AFCOS established in each Member State in line with Article 12(a) of the OLAF Regulation currently serve as the primary national interface for cooperation with OLAF and the EU’s 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;

Removed1. 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;

AddedVAT anti-fraud in the post-2027 MFF

Removed2. 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;

Added1. Reaffirms its calls highlighting the need for coordinated EU-level action against cross-border VAT fraud and for the EU and its Member States to strengthen administrative, judicial and law enforcement cooperation and to operationalise the multilateral early-warning system for carousel fraud, and its calls for the Commission to lower 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; notes that cross-border VAT fraud involves by definition several Member States, and in certain cases the flow of information from individual Member States to the EPPO is not sufficient to combat such cross-border VAT fraud; 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;

Removed3. 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;

Added2. Stresses that the protection of the EU’s financial interests requires determined action to address structural revenue losses stemming from large informal economies and widespread VAT fraud; recalls that EU authorities such as the ECA, OLAF and the EPPO have repeatedly identified VAT fraud as one of the most significant sources of losses for the budgets of the EU and the Member States and for the EU’s own resources;

Removed4. 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;

Added3. Underlines that reducing the scale of informal economic activity and strengthening the fight against VAT fraud would contribute to fairer burden sharing between Member States, safeguard the integrity of the internal market and help stabilise gross national income-based contributions; calls for the 2028-2034 MFF to include clear provisions, adequate resources and appropriate instruments to support effective action against informal economic activity and VAT fraud, in order to strengthen the protection of the EU’s financial interests;

Removed5. 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;

Added4. 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; recognises the role that the Single Market and Customs Programme for the period 2028-2034 will play in protecting the economic, financial and other interests of the EU and its Member States from fraud, corruption and other illegal activities, including risks related to VAT revenue; considers that the programme should support activities that strengthen the EU’s AFA, improve the reporting of irregularities to OLAF and the EPPO and enhance cooperation with the EU and national control, audit and investigative authorities, and the use of interoperable digital tools for anti-fraud detection and prevention;

Added5. Recognises that the Commission’s 2024 PIF report notes that revenue is the budgetary area most exposed to cross-border fraud; underlines the importance of the efforts to improve the collection and recovery of existing revenue, including the VAT-based own resource;

Added6. 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, as stressed by ECA Special Report 08/2025, without appropriate and adequate safeguards, this approach entails substantial risks to the protection of the EU’s financial interests; stresses that financing not linked to costs and simplified cost options must not weaken the traceability of EU funds to their final recipients and beneficial owners; insists that every spending programme under the next MFF, whatever its delivery model, maintain a complete audit trail, mandatory recipient and beneficial ownership data in a single interoperable risk-scoring tool, and ex post verification accessible to the EPPO, OLAF, the ECA and the discharge authority, within their mandates; maintains that the need to protect the EU’s financial interests implies consistency across penalties applicable to the most serious VAT and customs-related infringements;

Added7. 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; underlines that the Member States should ensure that their competent customs and VAT authorities establish regular coordination mechanisms, including through the Eurofisc framework, to facilitate the identification of discrepancies indicative of VAT fraud and the timely transmission of relevant data to Eurofisc, the EPPO and OLAF; calls for these bodies to be sufficiently funded and reiterates that whistleblowers should enjoy effective protection, in order to facilitate the detection and prevention of all forms of fraud;