The European Commission has announced the launch of the Transaction Network Analysis (TNA) tool, which is aiming to reduce VAT fraud.
So far, criminal activity has led to a gap in public finances adding up to EUR 50 billion a year. The new tool will aim to combat these losses by increasing the speed at which authorities can uncover and act on suspicious activity.
The Commission believes the TNA gives tax authorities faster and easier access to cross-border transaction information held by other tax authorities. This means they can act more quickly which is crucial to do before VAT fraudsters have time to disappear into the ether.
The Commission further hopes that the TNA, developed through close collaboration between Member States and the Commission, will allow closer cooperation between the EU’s network of anti-fraud experts (Eurofisc) for jointly analysing information so that VAT carousel fraud can be stopped as efficiently as possible. Their information can be checked with criminal records, databases and information held by Europol and OLAF, the EU’s anti-fraud agency.
The Commission has consistently pressed for the reform of the VAT system to make it more fraud proof. But progress has generally been slow. This tool, launched whilst the media reveals more high-profile cases of criminal gangs profiteering from VAT fraud, is a step in the right direction.