European Commission publishes VAT compliance gap due to Missing Trader Intra Community fraud report

27 March 2024

The European Commission (EC) has published a report attempting to analyse missing trader intra-community (MTIC) VAT fraud. 

MTIC is a type of VAT fraud in which a fraudulent trader supplies goods and services to other businesses, collects the tax due on the supply from their customers, and disappears without ever remitting it to the tax authorities.

MTIC fraud is estimated to have lost EU member states between €50 to €100 billion in VAT revenue, and the EC believes that this type of fraud amounts to a significant portion of the wider EU VAT Gap, which was last estimated to be around €61 billion per annum back in 2021.

This report analyses the methodologies that will be used for further reports and the future calculations that will be used to try to quantify the cost that this type of fraud has on EU countries. It also looks in detail at the different types of MTIC fraud including carousel fraud.