ECOFIN Council strengthens the EU fight against VAT fraud

May 8, 2026 EU VAT Update

At the Economic and Financial Affairs Council (“ECOFIN”) meeting on 5 May 2026, EU Finance Ministers reached political agreement on new measures aimed at strengthening the fight against cross-border VAT fraud. The agreement forms part of the EU’s wider anti-fraud and digital VAT agenda and complements the recently adopted “VAT in the Digital Age” (“ViDA”) reforms.

The key focus of the discussions was improving cooperation and data sharing between Member States and EU investigative bodies, particularly the European Public Prosecutor’s Office (“EPPO”) and the European Anti-Fraud Office (“OLAF”). Amendments to Council Regulation 904/2010 will allow these bodies to access and use VAT information more efficiently in cross-border fraud investigations.

Why fraud is still a major concern

Cross-border VAT fraud, particularly Missing Trader Intra-Community (“MTIC”) or “carousel” fraud, continues to result in significant losses for EU Member States, estimated at between €12.5 billion and €32.8 billion annually. Fraud schemes are increasingly more sophisticated and often involve organised criminal networks operating across multiple jurisdictions.

ECOFIN acknowledged that while initiatives such as Eurofisc (EU VAT fraud prevention network) have improved cooperation between tax authorities, further integration and faster access to VAT data are necessary to tackle fraud effectively.

Key measures agreed

The ECOFIN agreement includes several important developments:

  • enhanced access for EPPO and OLAF to VAT fraud data and Eurofisc information.
  • stronger coordination and intelligence sharing between Member States.
  • faster identification and investigation of suspicious cross-border transactions; and
  • improved cooperation between tax administrations and EU enforcement bodies.

The reforms are intended to accelerate investigations and improve the EU’s ability to detect and prevent organised VAT fraud.

Link with ViDA and digital reporting

The measures also align closely with the EU’s broader digital VAT strategy under ViDA. Mandatory digital reporting and e-invoicing for intra-EU B2B transactions are expected to provide the tax authorities with greater visibility over transaction flows and reduce opportunities for carousel fraud.

Together, these developments signal a continued move toward:

  • increased digitalisation of VAT compliance.
  • greater use of real-time transaction data.
  • enhanced data analytics and transparency; and
  • more coordinated VAT enforcement across the EU.

Implications for Businesses

Although the reforms primarily target enforcement authorities, businesses operating cross-border within the EU should expect increased scrutiny of VAT data, reporting accuracy, and governance processes.

The developments reinforce the importance of:

  • strong VAT controls.
  • accurate and timely reporting.
  • reliable audit trails; and
  • robust oversight of intra-EU transaction flows.

Next Steps

The agreement represents an important political milestone, although further legislative steps remain before the measures are formally adopted by the Member States. Nevertheless, the direction of travel is clear: the EU continues to intensify its coordinated and technology-driven approach to combating VAT fraud.

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