VAT evasion: EU Council moves to strengthen the mandate of European agencies

Brussels – More thorough and effective investigations, faster access to data, and greater cooperation with national authorities: the Ecofin Council is seeking agreement to crack down on VAT evasion by approving new rules aimed at overhauling the fight against undeclared and unpaid taxes. A political “agreement” is expected at the ministerial level at tomorrow’s (5 May) meeting, according to well-informed EU sources. The green light will allow the European Public Prosecutor’s Office (EPPO) and the European Anti-Fraud Office (OLAF) to access VAT information at the EU level, thereby strengthening the fight against VAT fraud in the EU. 

The fight against tax fraud falls within the remit of national governments, with the European Union playing a coordinating and collaborative role to ensure the better functioning of the single market. Each year, billions of euros are lost when “companies, wealthy individuals, and other taxpayers fail to contribute their fair share,” the EU Council condemns . Such losses not only reduce the resources available for public services — such as healthcare, education, and infrastructure — but also undermine economic fairness and stability across the EU. The European Commission estimates that 128 billion euros in VAT went uncollected in 2023, demonstrating the scale of the problem, especially in Italy. Hence, remedial action is needed.

There is therefore anticipation for granting European agencies new powers aimed at putting an end to these questionable practices, which, by limiting the proper functioning of the single market, also hinder the competitiveness that has become central and a priority in the political agenda of the European Union and its Member States. The current Cypriot Presidency intends to finalise the agreement and claim yet another success for its term. All eyes are therefore on Brussels.