Poland and Germany sign agreement of cooperation in the fight against VAT fraud.
The Polish National Revenue Administration and German Federal Ministry of Finance signed a cross-border agreement of cooperation to combat VAT fraud. As a result, they will enhance tax information exchange procedures. This follows similar agreement Poland have entered into with other EU Member States; including Czech Republic, Slovakia, Hungary and Lithuania.
As part of this agreement, both countries will facilitate the sharing of information and data to detect missing trader (carousel) fraud. Trader fraud is one of the biggest contributors to the EU VAT Gap, which stood at €140billion in 2018. The VAT Gap is the difference between the expected VAT collection and the actual VAT collection.
Both countries will also set up a team of VAT experts to review cross-border transactions and data. By using data analytics and other methods, the teams will also expose other fraudulent activities.
The fight against VAT fraud is always high on the agenda of EU Member States, with tax collection an important part of a country’s economy. Therefore, it is very likely that there will be more agreements combating VAT fraud, similar to Poland and Germany; ensuring businesses pay the correct amount of VAT in the correct country.