The IOTA Report on ”How to Detect, Prevent and Combat New VAT Fraud Schemes Facilitated by Digital Platforms Selling Goods” has been published on the IOTA website. The report was written by the Subgroup of the IOTA Forum on Combating VAT Fraud and it sheds light on VAT fraud schemes emerging in the digital economy.
The report is based on data provided by 32 IOTA member tax administrations participating in a country survey conducted in January-March 2020 as well as the analysis of further third-party resources. It provides examples of the effective and appropriate use of various types of databases, such as national, international, or commercial. The findings are complemented by solutions implemented by IOTA member tax administrations against VAT fraud schemes arising concerning digital platforms.
Besides outlining differences between fraud and general non-compliance to VAT rules, the report describes various elements of new VAT fraud schemes related to the online transactions of goods. A special focus is on digital economy platforms that make the fraudulent schemes possible (i.e. platforms being used in several ways and with different levels of involvement/participation to commit VAT fraud). The role of digital platforms (whatever it may be) has been considered as a key point of this report.
The report also takes into consideration other important aspects of tackling VAT fraud schemes emerging in the digital economy, such as:
- the role of fulfillment warehouses;
- sources of information used;
- risk analysis tools;
- best strategies and new approaches against the described fraudulent activities.
IOTA would like to thank all members that contributed to the production of this report, but in particular, the members of the Subgroup (Azerbaijan, Finland, France, Hungary, Italy, Norway, Portugal, Spain, and the United Kingdom).
The Report is available for registered website users on the IOTA website.