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Latest EU Directives: Combating Cross-Border Payment Fraud and VAT Non-Compliance

The latest EU directives combating cross-border payment fraud have come into effect as of 1st January 2024. These regulations aim to enhance transparency, specifically addressing Value-Added Tax (VAT) fraud. The rules are tailored to assist EU Member States and equip tax administrations with payment information, with a focus on e-commerce – a notable area for VAT non-compliance and fraud. This illicit activity contributes to gaps in vital tax revenues that support essential public services. The collective implementation of these measures reflects a proactive approach to strengthen the EU’s anti-fraud initiatives and protect public finances.

Examples of the impact of such VAT fraud are evident in recent investigations. In Athens, Greece, the European Public Prosecutor’s Office (EPPO) uncovered a criminal organisation orchestrating a massive €36.4 million VAT fraud scheme on December 11, 2023. Exploiting a complex network of companies across Greece, Cyprus, and Slovakia, the criminals evaded €29 million in VAT payments and secured €7.4 million in undeserved VAT refunds.

Similarly, the ‘Goliath’ investigation led by the EPPO in Hamburg, Germany, launched on November 22, 2023, targeted criminal groups spanning eight countries: Denmark, France, Germany, Hungary, Lithuania, the Netherlands, Sweden, and Switzerland. This operation resulted in substantial financial losses of at least €85 million to both the EU and national budgets. These cases highlight the urgency and significance of the newly implemented rules in fortifying the EU’s anti-fraud initiatives and safeguarding public finances.

Non-compliance carries diverse implications, ranging from modest fines to substantial operational disruptions, especially during audits by local tax authorities or due to late or omitted tax filings. The severity of consequences varies globally, with some jurisdictions imposing fixed, relatively small penalties, while others apply penalties as a percentage of company revenue, potentially leading to the suspension of business licenses.

Here is where organisations can benefit from the WiseBOS DAC6 Solution, a user-friendly, standardised web-based solution designed to simplify and streamline tax reporting obligations under the EU 2018/822 Directive (DAC6) for cross-border tax arrangements. With a built-in wizard, users can effortlessly provide all mandatory information required by the directive. Automatic validations ensure the accuracy and compatibility of the produced XML file with the Directive’s requirements.

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Stay ahead of regulatory challenges and safeguard your business from potential financial and operational setbacks. Explore how WiseBOS DAC6 can streamline your tax reporting obligations and ensure compliance with the latest EU regulations.