What makes carousel and VAT fraud possible?
“Lack of speed makes carousel fraud an issue” There are a number of contributing factors which combine to produce a system where fraud is possible: • The delay between a merchant collecting tax from a sale and remitting it to the Tax Authority • Lack of communication between tax authorities in different countries • Slow and inefficient legacy data systems in most member states • Lack of accurate data on fraud • By using a system of taxing on invoice rather than on settlement, the fraudsters are able to receive claims for credits before the seller has deposited the VAT.
