August 10, 2026

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The European Post

Policy • Diplomacy • Strategic Insight

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August 10, 2026

Newsletter

The European Post

Policy • Diplomacy • Strategic Insight

LATEST
Five Joint Defence Projects Launch Europe’s Military ShieldElectrification Plan Aims to Make Europe First Electro ContinentHorizon Europe Budget Fight Heats Up as Ministers Push BackGoogle’s DMA Fine Sets Off a Transatlantic Tariff ClashTwenty New University Alliances Join Erasmus for Two YearsForeign Subsidies Case Puts Temu in the EU’s SightsVan Tachographs Now Mandatory for Cross-Border FleetsStress Test Exposes Gaps in Euro Area Bank DefencesEurope Bets on a Gulf Partnership Before the Riyadh SummitWhy the Atlantic Route Now Runs Through MauritaniaKyiv and Chisinau Advance as the EU Accession Talks Gather PaceEurope’s New Digital Border System Beds In After a Rocky RolloutBrussels Mounts Its Largest Wildfire Response as the Fires SpreadRetail Spending Slipped in June, Wrong-Footing EconomistsHeatwave Warning Puts Brussels on Alert for Vulnerable GroupsKANAL’s 230 Million Euro Museum Sets a November Opening DatePension Savings Rules Get a Reset as the EU Scraps the 1% CapMedicine Shortages Move to the Heart of Europe’s Pharma ResetJapan Becomes Europe’s Closest Security Partner in AsiaCan Europe’s New Zealand Deal Anchor It in the Pacific?Five Joint Defence Projects Launch Europe’s Military ShieldElectrification Plan Aims to Make Europe First Electro ContinentHorizon Europe Budget Fight Heats Up as Ministers Push BackGoogle’s DMA Fine Sets Off a Transatlantic Tariff ClashTwenty New University Alliances Join Erasmus for Two YearsForeign Subsidies Case Puts Temu in the EU’s SightsVan Tachographs Now Mandatory for Cross-Border FleetsStress Test Exposes Gaps in Euro Area Bank DefencesEurope Bets on a Gulf Partnership Before the Riyadh SummitWhy the Atlantic Route Now Runs Through MauritaniaKyiv and Chisinau Advance as the EU Accession Talks Gather PaceEurope’s New Digital Border System Beds In After a Rocky RolloutBrussels Mounts Its Largest Wildfire Response as the Fires SpreadRetail Spending Slipped in June, Wrong-Footing EconomistsHeatwave Warning Puts Brussels on Alert for Vulnerable GroupsKANAL’s 230 Million Euro Museum Sets a November Opening DatePension Savings Rules Get a Reset as the EU Scraps the 1% CapMedicine Shortages Move to the Heart of Europe’s Pharma ResetJapan Becomes Europe’s Closest Security Partner in AsiaCan Europe’s New Zealand Deal Anchor It in the Pacific?

Carousel Fraud Networks Lose Quiet Lane As Eurofisc Opens VAT Files

Roald Dahl
Research Director, External Relations and Diplomacy

VAT carousel rings spent the past decade exploiting a structural blind spot in the European single market, the data silos that kept Member State tax authorities, the European Anti-Fraud Office and the European Public Prosecutor’s Office operating in separate lanes on cross-border fraud. That blind spot is shrinking. The Council’s 5 May agreement on the revision of Regulation 904/2010 hands OLAF and the EPPO direct, targeted access to the VAT data held inside Eurofisc, the bloc’s anti-VAT fraud cooperation network, and mandates the network to share its risk analysis with both investigative bodies in defined circumstances. Once Parliament returns its opinion in July, the file will be ready for formal adoption and the regulation will apply twenty days after Official Journal publication, opening a new operational chapter for the bloc’s fraud investigators.

The political economy behind the move is simple arithmetic. The VAT gap inside the EU is estimated to run between 60 and 70 billion euros annually, and missing trader intra-community fraud alone accounts for a single-digit percentage of that figure that nonetheless costs Member States more than a small national budget. The two most recent OLAF and EPPO operations underline how organised the underlying networks have become. The OLAF-coordinated VAT and customs fraud case closed at the end of April uncovered evasion of approximately 118 million euros in customs duties and 79 million in VAT through schemes built on undeclared imports. The EPPO’s Investigation Velum reached its operational phase on 21 May with sixteen coordinated searches in France, Germany, Italy and Poland into a small electronics carousel scheme that prosecutors say was run by a criminal organisation linked to the same operational core uncovered in the Goliath and Midas investigations a year earlier.

What the new Council position fixes is the cooperation choke point that has slowed cases like Velum at the early stage. OLAF and the EPPO have lacked the legal authority to access Eurofisc’s risk profiles and Member State VAT transaction data without going through the originating tax administration, a routing that costs investigators weeks at exactly the point when carousel rings rotate their shell companies and move funds out of EU jurisdictions. Under the new rules, both bodies will obtain direct access to Member State VAT information under strict data protection conditions, and Eurofisc will be obliged to transmit its own risk analysis to both bodies where the threshold is met. The Commission’s tax services frame the change as the missing piece in a five-year programme that began with the VAT in the Digital Age package and the introduction of digital reporting requirements from 2030.

OLAF’s 2025 annual report, released on 20 April, illustrates the scale of the wider recovery effort the cooperation architecture is built to support. The office recommended the recovery of close to 597 million euros of misused EU funds last year, prevented an additional 18 million in unwarranted spending, closed 209 investigations and opened 254 new files. Cross-border tax and customs fraud accounted for the single largest share of the new caseload, with sanctions circumvention and environmental fraud trailing in second and third place. The director-general’s preface to the report flagged Eurofisc data access as the single most consequential change in the office’s external operating environment for 2026 and 2027.

National finance ministries will need to recalibrate. The Council file commits Member States to ensure that domestic implementation acts are in place to permit the direct sharing of VAT data with the two EU bodies before the regulation enters application. The Commission expects the operational ramp-up to take roughly twelve months after publication, with the first OLAF and EPPO requests under the new regime arriving in the second half of 2027. Industry has, predictably, voiced concerns about data protection and the protection of legitimate cross-border traders caught in carousel-adjacent screening, but the broad direction of travel is now politically settled.

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