Missing Trader Fraud in European VAT

Sebastian Pfeiffer () and Pavel Semerad ()
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Sebastian Pfeiffer: Institute for Austrian and International Tax Law, Vienna University of Economics and Business
Pavel Semerad: Department of Accounting and Taxes, Faculty of Business and Economics, Mendel University in Brno

No 2013-41, MENDELU Working Papers in Business and Economics from Mendel University in Brno, Faculty of Business and Economics

Abstract: This article deals with various aspects of carousel frauds in which missing traders play a crucial role during intra-union transactions. The most important question is how to stop this kind of crime, which causes a huge tax gap in collecting value added tax. In this paper a detailed analysis of fraud patterns including model calculations was carried out. Very important for tax administration in the European Union are judgments of the European Court of Justice dealing with questions concerning the controversial parts and interpretations of the law in Member States and the Directive. Several judgments from Austria, the Czech Republic and Germany aimed at fraud in value added tax were used. Special emphasis is devoted to the solution to tackle VAT and carousel frauds. The opinions of the authors and the European Union are discussed and new planned solutions to fraud are examined as well. Although QRM allows Member States to apply for an exemption to introduce reverse charge mechanism, the Czech Republic is used as a model example to show legal solutions after earlier unsuccessful application for reverse charge mechanism on fuel sale.

Keywords: Carusel fraud; missing trader; value added tax; tax evasion (search for similar items in EconPapers)
JEL-codes: H20 H26 (search for similar items in EconPapers)
Pages: 20
Date: 2013-10
New Economics Papers: this item is included in nep-acc, nep-eur, nep-iue and nep-pub
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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