According to the investigators, they uncovered a network of “criminal activities” that was active in 26 of the 27 EU member states and other countries. The network extended to Albania, China, Mauritius, the United Arab Emirates and the USA.
The European Public Prosecutor’s Office began investigating a year and a half ago after being contacted by Portuguese authorities. It involved a company in the Portuguese city of Coimbra that sold cell phones and other electronic devices and was suspected of VAT fraud.
The EPPO, Europol and national authorities encountered a widespread fraud scheme involving around 9,000 companies. This chain included companies acting as suppliers of electronics and others selling those devices online while claiming VAT refunds from national authorities before sending that revenue abroad and disappearing.
According to estimates by Europol, this so-called VAT carousel costs the European Union almost 50 billion euros a year. Several companies based in at least two EU Member States are involved in this scam. It consists in obtaining the deduction or refund of VAT on an intra-Community supply of goods, even though this VAT has not been paid to the competent tax authority.