1 NEW MODELS OF VAT EVASION EXPERIENCED IN

1 NEW MODELS OF VAT EVASION EXPERIENCED IN THE EU COUNTRIESNEW TRENDS OF VAT FRAUD IN THE EU AND THIRD COUNTRIES Amerissa Efstathiou Aikaterini Bouzounieraki Ministry of Economy and Finance, Greece Central Liaison Office

VAT BEFORE THE ADHESION IN THE E. U. VAT application in the national territory VAT upon importation (customs procedure)

VAT AFTER THE ADHESION IN THE E. U. Abolition of the fiscal frontiers No checking or controls at the member states frontiers Intra-Community transactions system New rules and regulations Close administrative cooperation between the member states

INTRA-COMMUNITY TRANSACTIONS GOODS OR SERVICES Individuals pay the Vat in the member state where they buy Traders pay the Vat in the member state of the final consumption

What is CLO? 5 Central Liaison Office Specific points in the national Tax administration of all Member States Competent authority for the exchange information concerning transactions between the Member States EC Regulations 1798/2003 and 1925/2004

6 What is VIES database? Vat Information Exchange System Since 1/1/1993, when the Custom borders were abolished. An alternative mechanism to secure the VAT revenue

7 VIES Database consists of: Full registration data concerning the traders who commit intra-Community transactions (Vat number, name, address, date of issue of the Vat number and date of deregistration) Data concerning the amounts of Intra-Community supplies committed in a quarterly basis On-line access

8 STRUCTURE OF THE MINISTRY OF ECONOMY & FINANCE MINISTER OF ECONOMY & FINANCE DEPUTY MINISTER OF TAXATION SECRETARY GENERAL OF TAXATION & CUSTOMS DEPUTY MINISTER OF GENERAL STATE ACCOUNTING OFFICE SECRETARY GENERAL OF INFORMATION SYSTEMS SECRETARY OF ANTI-FRAUD UNITS

ORGANIZATION CHART OF THE GREEK VAT DIRECTORATE 9

10 CLO OF GREECE ESTABLISHED: 1 -1 -1993 after the abolition of customs borders controls MISSION : Mutual assistance & Fight against the VAT intra-community fraud ORGANISATIONAL POSITION : 4 th Section in the VAT Directorate of the Greek Ministry of Economy and Finance STAFF: Head and 15 officials.

11 SERVICES COOPERATING WITH THE GREEK CLO NATIONAL LEVEL Directorate for Mutual Assistance of Recovery Interregional & Regional Tax Audit Centres Ministry of Transport CLO Special Units Against Fraud Customs Offices Directorate of Registry General Secretariat of Information Systems IT systems (internal & European) Local Tax Offices

12 SERVICES COOPERATING WITH THE GREEK CLO COMMUNITY LEVEL EUROPEAN COMMISION (TAXUD DG and OLAF DG) OTHER CLOs (Administrative cooperation) ANTIFRAUD UNITS in other Member States CAROUSEL FRAUD TEAMS in other Member States INTELLIGENCE TEAMS in other Member States

13 RESPONSIBILITIES OF THE GREEK CLO 1. Mutual Assistance A. Exchange of information with the other CLOs via electronic system CCN/CSI • Regulation 1798/2003/EC. • Forms SCAC 2004 B. Extended exchange of information between member states without prior request (Regulation 1925/2004) 2. Contact point for the fight against Carousel fraud

14 RESPONSIBILITIES OF THE GREEK CLO 3. Member of the European Carousel Network and the Autocanet 4. Monitoring of the VIES registry database of the persons who commit intra-Community transactions 5. Verification of the validity of the VAT numbers of the EU traders 6. Exchange of information regarding electronically supplied services by taxable persons not established within E. U (VAT on e-services) 7. Monitoring the process of the Recapitulative statements of intra - Community acquisitions and supplies 8. Member of the Coordination Team for the Multilateral Controls

15 RESPONSIBILITIES OF THE GREEK CLO 9. Management of fiscal audits concerning intra- Community transactions 10. Taking care of the assessment of the VAT due in Greece from the foreign taxpayers and sending the file to the Directorate of Recovery (Directives 2001/44/EC and 2002/94/EC Mutual Assistance of Recovery) 11. Participation in E. U meetings, seminars, conferences, working groups 12. Harmonization of the Greek VAT Law to the E. U VAT Law 13. Guidance to local tax offices for the implementation of VAT legislation (e. g. Circulars, guide manuals) 14. Training of the Greek VAT Tax Officers and Auditors

16 VAT FRAUD IN INTRA-COMMUNITY TRADE Intra-Community supplies between taxable persons are exempt in the Member State of origin. Conditions: The supplier and the purchaser of the other member state are registered in the VIES database The goods are transported to the other member state (proof documents)

17 VAT FRAUD IN INTRA-COMMUNITY TRADE Submission of recapitulative statement of IC supplies - data available in VIES Supplier: right of deduction/refund of input tax Taxation takes place in the Member State of destination This exemption mechanism exposes the VAT system to fraud because goods move without being taxed

18 VAT FRAUD A REAL WORRY IN THE VBVVAKAJKAMAKD STATES MEMBER Huge amounts of VAT lost in all member states It also jeopardizes legitimate trade and distorts competition to the benefit of dishonest traders