German and Austrian VAT Proposals to Combat Carousel Fraud

Abstract: There is much ado about carousel fraud, also called missing trader intra-community (MITC) fraud, in the European Union (EU). This article briefly describes carousel fraud and the proposals that have been made to combat this type of fraud. It focuses in particular on the German and Austrian solution, which defines carousel fraud away by proposing a system of comprehensive reverse charging combined with universal cross-checking. The article concludes that this solution throws the baby out with the bathwater.

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