From Reverse Charge to Real-Time Reporting: The European Union’s Evolving Fight Against Carousel Fraud

Over recent decades, VAT fraud has become one of the most persistent fiscal and administrative challenges in the European Union. It undermines the smooth functioning of the internal market, distorts fair competition, reduces Member States’ revenues, and erodes the European Union’s own financial resources. A particularly damaging form of this fraud in intra-Community trade is “carousel fraud”. The author analyses the main preventive and repressive measures adopted at the EU level to combat carousel fraud, drawing on legislation and the case law of the Court of Justice of the European Union (CJEU). It evaluates how well these measures achieve their intended purpose and highlights the continuing need for a coherent and uniformly applicable EU-wide approach. The author argues that, despite the significant efforts made, the current EU framework still lacks the necessary harmonization to effectively eliminate carousel fraud across the Member States.