The EU member states want to fight fraud known as ‘VAT roundabouts’ in a more efficient way. During a Finance Minister’s meeting in Amsterdam, the majority voted in the application of a system that has been developed in Benelux over the last two years. It‘s an automatic analysis system that doesn’t create extra administrative charges for businesses, according to finance minister Johan Van Overtveldt (New Flemish Alliance).
A VAT roundabout involves at least one business that insures it won’t have to pay the treasury VAT, so it keeps all the profit. As fraud systems are often complex and cross borders, international cooperation is essential.
This is the reason the Dutch State Secretary for Finance, Eric Wiebes, has presented the Transactional Network Analysis (TNA) to Ecofin. Fraud can be traced much faster thanks to the automatic analysis and exchange of data between national tax services. “If we can develop this at European level, we can detect fraud in a few days in most cases, instead of a few months. That would help us get back a large part of the 50 billion euros we lose to VAT roundabouts”, explained Eric Wiebes.
“Belgium, as an initiator, is very positive towards the application of the TNA”, Johan Van Overtveldt said during the meeting. “This project has already been applied to the whole of Benelux. We now have an exceptional opportunity to use this tool. It has already proved its worth at European level”.
Johan Van Overtveldt also said the TNA doesn’t create extra administrative charges for businesses. “On the contrary, all we would do is buse the data we already have to the best of our ability”.
Not all countries support the TNA system. The Czech Republic and Austria also want to stop VAT roundabouts, but prefer other methods. The European Commission has been asked to look at its feasibility.
(Source: Belga)
