Improving Efficiency to Combat VAT Frauds at the European Union Level

• Author: Nelu Dorinel Popa, Cezara Popa
• Profession: Faculty of Economics and Law, University of Medicine, Pharmacy, Science and Technology of Târgu Mures, Romania/Faculty of International Business and Economics, Bucharest University of Economic Studies, Romania
• Pages: 200-210

Improving Efficiency to Combat VAT Frauds at

the European Union Level

Assistant professor Nelu Dorinel POPA

1

Student Cezara POPA

2

Abstract

The value-added tax is an indirect tax that represents both an inherent resource

of the European Union b udget an d a resource of EU Member States budgets. Conse-

quently, frauds against national VAT affect both the national budget and the Member

States’ budget, which entail the activities for combating this type of fraud to be correlated

both at national and at the Community level. Therefore, the Romanian jurisprudence pro-

vides examp les in which the nation al judicial authorities have identified a continuous

circulation, a "carousel" type, of VAT fraud, between several Member States of the Eu-

ropean Union, which has harmed each of the budgets of the states on whose territory it

has "transited" an d implicitly, the Community budget. The investigation of these frauds

and the criminal prosecution of the perpetrators was carried out only at the national

level, in a fragmented way, but it also required the judicial cooperation of the Member

States in order to support the requesting states in carrying out the investigations. How-

ever, the national authorities are missing the cross-border dimension, which requires a

European Union authority to investigate such frauds, to correct the deficiencies of the

current regime regarding compliance with law, based exclusively on national efforts and

to increase their consistency and coordination.

Keywords: VAT frauds, European Union, case law, European cooperation.

JEL Classification: K33, K34

1. VAT and its weight in the budget of the European Union

The value-added tax is an indirect tax which represents both an inherent

resource of the European Union general budget and a resource of the Community

states’ budgets

3

.

For a perspective regarding the weight this tax has at the level of the

Community budget, we forward the Annual Report on the implementation of the

budget for 2018, published in the Official Journal of the European Union, in

1

Nelu Dorinel Popa - Faculty of Economics and Law, University of Medicine, Pharmacy, Science

and Technology of Târgu Mureş, Romania, popaneludorinel@yahoo.com.

2

Cezara Popa - Faculty of International Business and Economics, Bucharest University of

Economic Studies, Romania, cezara.popa@yahoo.com.

3

See in this regard Mihaela Tofan, A View on the VAT Split Procedure: the Estimated Effects of

the Proposal for Regulationp, in Adriana Moțatu, Ioana Nely Militaru (eds.), Diversity and

Interdisciplinarity in Business Law, ADJURIS – International Academic Publisher, Bucharest,

2017, p. 205.