Missing trade fraud / carousel fraud

Missing trader fraud concerns fraud with VAT payments. In this type of fraud an entrepreneur omits to pay VAT to the tax authorities while he did charge the VAT on his delivered goods or services.

Another way to commit fraud is when goods are resold in a chain and VAT is charged. The buyer deducts the VAT as input tax while the seller omits to pay the VAT to the tax authorities. This can go round in a circle, hence the term carousel fraude.

Distinctive for carousel fraud is that often a EU-transaction is included in the chain. In a EU-transaction goods or services (between two EU member states, e.g. the Netherlands) can be delivered against a 0% VAT tariff.

 

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