Digital VAT Carousel Fraud: A New Boundary for Criminality

Fabrizio Borselli, Silvia Fedeli and Luisa Giuriato

No 170, Working Papers in Public Economics from Department of Economics and Law, Sapienza University of Roma

Abstract: The paper analyses the first Value Added Tax (VAT) fraud on Voice over Internet Protocol, the Phuncards-Broker operation, which took place in Italy in 2005-2007. The scheme consists of a chain of frauds on e-services that represents an important evolution of the ""classic"" models of carousel fraud, showing the increasing vulnerabilities of the VAT systems. The authors explore the policy implications for tax authorities, looking at how changes in their strategies may tackle the incentives to participate in the fraud. We argue that, in the short term, information technology (IT) solutions might offer some of the best answers when effectively combined with reverse-charge, while, in the longer-term, an extension of the One-Stop-Shop system may represent a new hypothesis of VAT reform in an anti-fraud perspective.

Keywords: EU Value added tax; VAT fraud; reverse-charge; One-Stop-Shop system (search for similar items in EconPapers)
JEL-codes: H20 H21 H22 H26 K34 K42 (search for similar items in EconPapers)
Pages: 35
Date: 2015-06
New Economics Papers: this item is included in nep-ict, nep-iue and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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