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B Law & Tax
11 January 2024

Tax Advisor: Anti-VAT Fraud Struggle in the EU: New Rules for Cross-Border Payments

Starting from January 1, 2024, new transparency rules come into effect to assist European Union member countries in the battle against Value Added Tax (VAT) fraud.


Focus on E-commerce and Its Challenges

These rules will provide EU tax authorities with information on payments, enabling them to fraud etect VAT fraud more effectively. Special emphasis is placed on e-commerce, an area prone to non-compliance and VAT fraud that impact essential public service revenues.


Examples of Fraudulent Practices and the Need for Strengthened Instruments

For instance, some online sellers without a physical presence in an EU member state engage in transactions without registering for VAT or declare values lower than the actual ones. Therefore, more robust tools are needed to detect and curb this illicit behavior.


Details of the New Transparency System VAT

The new system relies on payment service providers, responsible for over 90% of online purchases in the EU. Starting from January 1, these providers must track recipients of cross-border payments and, from April 1, transmit information to EU authorities about those receiving more than 25 cross-border payments per quarter.


Optimizing the Fight Against VAT Fraud in E-commerce

Payment information will be centralized in the Electronic Central Information System on Payments, linked to Eurofisc, to facilitate EU member states in data analysis and identification of online sellers violating VAT obligations. Eurofisc officials can take national-level actions, such as processing information requests or canceling VAT number registrations, successful measures in the fight against e-commerce fraud.




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