Changes from report parliamentary committee draft to plenary report

Added8. Calls for synergies in, and the possible consolidation of, the EU’s AFA to be explored; highlights the fact that the current AFA faces challenges such as fragmentation, the lack of an integrated governance framework, overlapping competencies, insufficient resources and unreliable data, which may lead to the underestimation of VAT fraud against EU finances; calls on the Commission, in this regard, to: (i) create a common governance framework and guidelines to coordinate all anti-fraud actors; (ii) implement a unified reporting system to consolidate the available information; (iii) promote and support the greater use of digital tools to improve data collection, exchange and analysis while reducing administrative burden in particular for SMEs; and (iv) strengthen financial and human resources to ensure the effectiveness of AFA components; insists that the new MFF equip the EPPO, OLAF, Eurojust and Eurofisc adequately, including by planning the assignment of a sufficient number of specialised investigators from the relevant services;

Cross-border cooperation – closing the information gap

Change 7

Changed6.9. Stresses that granting the EPPO and OLAFOLAF, direct,in automatedthe andexercise centralisedof their mandates, access to VIES, EurofiscVIES and the Central Electronic System of Payment Information is– essentialas indicated in the Opinion of Parliament’s Committee on Budgetary Control on the proposal for ensuringa Council regulation amending Regulation (EU) No 904/20108 – ensures 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; insistswelcomes thatthe general agreement reached in May 2026 on the amended Regulation (EU) No 904/2010, ifand adopted,insists that it must be implemented with full respect for the distinct legal frameworks applicable to OLAF’s administrative mandate and the EPPO’s criminal enforcement mandate, in line with the European Data Protection Supervisor’s Opinion 1/2026 of 7 January 2026;

Change 8

Removed7. 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;

Added10. Calls on the Commission, in the context of the post-2027 MFF, to ensure adequate funding and staffing for OLAF and the EPPO in order to strengthen data analysis capacities, operational coordination, investigations and recovery actions relating to VAT fraud, and for Eurofisc, through the Single Market and Customs Programme;

Removed8. 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;

Added11. 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, including through direct exchange of information;

Added12. Recognises that taking advantage of a real-time and data-driven economy has significant benefits for the protection of the EU’s financial interests, while reducing the administrative burden on public authorities and businesses operating and trading across borders within the EU; underlines the importance of improving the effectiveness of data sharing by creating a digital ecosystem allowing seamless, real-time and secure movement of standardised, structured and machine-readable data between businesses and public authorities, notably national tax administrations, with a view to limiting possibilities for committing fraud and tax evasion;

Added13. Stresses that access to VAT data granted to the EPPO and OLAF improves detection and prosecution capacity; stresses that the effectiveness of EPPO and OLAF access to VAT information depends on whether national authorities are independent and adequately resourced; underlines the importance of investing in advanced IT tools, including Eurofisc’s TNA tool and the Central Electronic System of Payment Information, and in AI technologies, as well as in their continuous improvement, in order to support the EU and its Member States in detecting and preventing fraud at the earliest possible stage‑;

Added14. 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; further calls for Eurofisc to initiate, whenever appropriate and possible, the procedure aiming at suspending VAT identification numbers in the VIES where there are significant indicators of VAT fraud;

Added15. Notes that despite Eurofisc identifying over EUR 12 billion in fraudulent or suspicious VAT transactions in 2024, a significant detection gap persists; considers that national financial intelligence units, through suspicious transaction reporting on associated money flows, are well positioned to complement Eurofisc’s VAT transaction intelligence; calls on the Commission to assess the best way to establish adequate and seamless cooperation between Eurofisc and national financial intelligence units, subject to applicable data protection requirements;

16. 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;

Change 9

Removed10. 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;

Added17. Notes that EPPO investigations have shown that professional enablers – such as accountants, lawyers and brokers – have a role in the setting-up of shell company chains that make carousel fraud scalable; calls on the Commission to enforce full transposition of the beneficial ownership provisions of the sixth Anti-Money Laundering Directive9, including on the role of professional enablers;

Removed11. 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;

Added18. Acknowledges that the Reverse Charge Mechanism, as provided for under Articles 199a and 199b of the VAT Directive10, 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;

Removed12. 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;

Added19. 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) 2023/222611 (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 the 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;

Removed13. 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;

Added20. Stresses that EPPO investigations have revealed hybrid schemes in which VAT fraud is systematically combined with money laundering and corruption; warns that, beyond depriving Member States of vital public revenue, VAT fraud thereby enables corruption and erodes the institutions of the EU and the Member States and public trust in the rule of law; calls on the Commission to ensure, through the AFA legislative package, structured operational cooperation between anti-fraud bodies and AMLA;

Added21. 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 to build the anti-fraud safeguards identified as necessary into the ETS2 framework before its operational launch; 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;

Added22. 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, the type of VAT fraud (such as carousel fraud, import VAT fraud, MTIC fraud), and the amounts recovered;

Added23. Calls on the Commission to enable Member States to work together more closely on a daily basis in seamlessly exchanging intelligence on VAT fraud cases as soon as intelligence is known, as well as in sharing knowledge and best practices on VAT fraud detection; emphasises that AI should be utilised for this purpose whenever possible;

Reforming the EU AFA

Change 10

Changed14.24. 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; considers that, in view of the considerable financial impact of cross-border fraud on revenue, in particular VAT and customs duties, the protection of the EU’s revenue should be one of the strategic priorities within the context of the review;

Change 11

Removed15. 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;

Added25. Stresses that the AFA revision should suggest measures to prevent a lack of judicial independence, ineffective prosecution services and insufficient anti-corruption safeguards, in such a way to prevent, detect and recover VAT fraud; points out that where structural vulnerabilities create heightened risk for VAT fraud losses, targeted recommendations are required and recalls that the Conditionality Regulation12 allows measures to be taken where deficiencies in tackling tax fraud, tax evasion, corruption and other breaches affect the collection of EU revenues;

Added26. Recognises the particular difficulty of recovering VAT revenue lost to fraudulent activity; underlines, therefore, the importance of preventive and precautionary measures and urges the Commission, in the context of the AFA review, to explore targeted and risk-based approaches, such as sampling and statistical extrapolation of the results of a limited number of controls to the overall population of affected transactions, and the preventive blocking of VAT numbers suspected to be used for fraudulent purposes;

Added27. 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 Regulation and, where appropriate, consistent further amending of the Europol Regulation, the Eurojust Regulation, 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 mechanisms or guidelines;

Added28. Expresses its concern about the findings identified by the ECA in Special Report 26/2025 that the reporting ratios between Member States vary considerably, with some reporting far more and others far fewer fraud allegations than their proportion of revenue; calls on the Commission to analyse these variations, notably, whether they are the result of weaknesses in detection or, reversely, strengths in prevention, and to suggest appropriate action to address under-reporting;

29. 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;

Change 12

Changed17.30. 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 reportingreporting, which should include performance indicators, on follow-up actions taken in response to OLAF recommendations and judgments in EPPO cases; stresses that well targeted indicators are essential to support evidence-based policymaking, improve accountability and enable meaningful parliamentary scrutiny of the EU’s AFA; recalls the importance of exchanging best practice between the Member States;

Change 13

Added31. Calls on the Commission to ensure that the AFA review establishes structured operational cooperation between the EU anti-fraud bodies and AMLA, reflecting the close link between VAT fraud and money laundering; takes the view that beneficial ownership transparency, underpinned by AMLA’s access to central registers under Directive (EU) 2024/1640, could be a valuable early-warning tool for the early identification of shell entities used in missing trader networks;

32. 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;

Change 14

Added33. Reiterates Parliament’s long-standing call for a single, integrated and interoperable information and monitoring system for EU spending, which should include data mining and risk-scoring tools; insists that the use of such a system must be a precondition for accessing EU funds under the next MFF; demands that all Commission and national databases used for the management and monitoring of EU funds be directly accessible to the ECA, without prior aggregation or modification, in order to safeguard the independence and effectiveness of audits;

Added34. Calls for the systematic and strengthened use of the Early Detection and Exclusion System (EDES) under the next MFF; stresses that economic operators involved in fraud, corruption, serious irregularities, including VAT-related irregularities, or serious breaches of contractual obligations, must be effectively excluded from EU funding across all programmes and delivery models, including performance-based instruments; regrets the fragmented use of exclusion mechanisms and the lack of interoperability between EDES and national systems; stresses that effective exclusion mechanisms are essential to prevent the repeated misuse of EU funds and to ensure a credible EU anti-fraud framework;

The AFA components – OLAF Regulation

35. 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;

36. 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;

Change 15

Added37. Urges the EPPO and OLAF to devote adequate attention to, and allocate sufficient resources for, serious VAT cases that would recover larger amounts of lost revenue for the EU budget;

Added38. Emphasises the importance of the cooperation between Europol and OLAF in forensic analysis operations, and calls for clearer rules governing such cooperation to enable synergies in the area of forensics in order to optimise coordination; calls, furthermore, for strengthened analytical cooperation between OLAF and Eurofisc in combining and analysing customs and VAT data for the detection of cases of customs and VAT fraud; underlines the importance of OLAF being granted full access to the EU Customs Data Hub in order to improve its detection and prevention work;

39. 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;

40. 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

Change 16

Removed23. 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;

Added41. Stresses the EPPO’s crucial role in the protection of the EU’s financial interests and as an essential component of the EU’s AFA competent for investigating, prosecuting and ensuring justice for crimes affecting the EU budget, such as fraud, corruption and cross-border VAT fraud;

Removed24. 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;

Added42. Stresses that the cross-border nature of carousel fraud means that any Member State not participating in the EPPO leaves an exploitable gap in the EU’s prosecutorial coverage; takes note of the Commission decision13 confirming Hungary’s participation in the EPPO, and of Ireland’s stated intention to bring forward all necessary legislation to join the EPPO;

Added43. Reiterates its long-standing call for the Commission to lower the EUR 10 million threshold under Article 2 of the PIF Directive, because it may fail to capture MTIC schemes structured across multiple Member States, and, if appropriate, to propose an amendment addressing this issue;

Added44. 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 and allow for an increased focus on serious criminal misconduct and large-scale offences that affect 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; observes that the EPPO needs adequate legal professional resources to handle VAT cases and urges the EPPO to hire more specialists in the area of economic law, VAT law and commercial law; stresses the need to provide the EPPO with sufficient human and financial resources to carry out all its duties;

45. 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;

46. 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;

Change 17

Removed27. 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;

Added47. Calls on the Commission, in cooperation with the EPPO and the Member States, to establish a clear and binding framework ensuring that assets and proceeds confiscated following EPPO investigations are effectively returned to the EU budget, in full or in part, and duly recorded as EU revenue; underlines that such a mechanism would strengthen deterrence, reinforce the credibility of EU anti-fraud efforts, contribute to the protection of the EU’s financial interests and ensure that recovered funds can be redeployed to finance EU priorities; stresses that transparency and reporting obligations on the amounts confiscated, returned and reallocated must be guaranteed, with full information provided to Parliament as budgetary and discharge authority;

Added48. 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 and enhance coordination between EU and national authorities in supporting the recovery process, while fully respecting the competences of the Member States and without prejudice to the legitimate rights and expectations of the parties involved and the parties 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

49. 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;

Change 18

Added50. Calls for Europol’s operational capacity to be strengthened through increased staffing and technical resources in order to enable it to be able to handle the large number of VAT fraud cases;

51. 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;

Change 19

Added52. Calls for Europol, in the revision of the Europol Regulation, to be given direct access to Eurofisc’s TNA tool, network maps of suspected fraud chains and list of high-risk traders, as well as other data collected by Eurofisc; notes that Europol does not currently have direct access to Eurofisc systems, that it cannot even query Eurofisc databases independently and that it does not receive Eurofisc data automatically and instead only receives information on a case-based arrangement; notes that this hampers investigations and causes time delays; calls for this to be reflected in the revised AFA;