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Missing Trader Fraud in European VAT

Author

Listed:
  • Sebastian Pfeiffer

    (Institute for Austrian and International Tax Law, Vienna University of Economics and Business)

  • Pavel Semerad

    (Department of Accounting and Taxes, Faculty of Business and Economics, Mendel university in Brno)

Abstract

This article deals with various aspects of carousel frauds in which missing traders play a crucial role during intra-union transactions. The most important question is how to stop this kind of crime, which causes a huge tax gap in collecting value added tax. In this paper a detailed analysis of fraud patterns including model calculations was carried out. Very important for tax administration in the European Union are judgments of the European Court of Justice dealing with questions concerning the controversial parts and interpretations of the law in Member States and the Directive. Several judgments from Austria, the Czech Republic and Germany aimed at fraud in value added tax were used. Special emphasis is devoted to the solution to tackle VAT and carousel frauds. The opinions of the authors and the European Union are discussed and new planned solutions to fraud are examined as well. Although QRM allows Member States to apply for an exemption to introduce reverse charge mechanism, the Czech Republic is used as a model example to show legal solutions after earlier unsuccessful application for reverse charge mechanism on fuel sale.

Suggested Citation

  • Sebastian Pfeiffer & Pavel Semerad, 2013. "Missing Trader Fraud in European VAT," MENDELU Working Papers in Business and Economics 2013-41, Mendel University in Brno, Faculty of Business and Economics.
    • Handle: RePEc:men:wpaper:41_2013
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    Citations

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    Cited by:

    1. Pavel Semerad, 2015. "How to stop VAT frauds on the fuel market: a usual price rule," MENDELU Working Papers in Business and Economics 2015-54, Mendel University in Brno, Faculty of Business and Economics.
    2. Stefanos A. Tsikas, 2020. "Enforce taxes, but cautiously: societal implications of the slippery slope framework," European Journal of Law and Economics, Springer, vol. 50(1), pages 149-170, August.

    More about this item

    Keywords

    Carusel fraud; missing trader; value added tax; tax evasion;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

    NEP fields

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