France publishes guidelines on carousel fraud

The right to deduct VAT on transactions directly or indirectly related to carousel fraud lies, among other factors, on the reasonable knowledge of the clients about the risk of VAT fraud carried by their suppliers.

26 February, 2016


 

Guidelines on carousel fraud published in France

 

The French authorities recently published guidelines on what are the tests, signs and evidences that taxpayers should take into account when facing potential VAT fraud. These signs include unreasonable prices, lack of contracts or payments into foreign bank accounts required.

The right to deduct VAT on transactions directly or indirectly related to carousel fraud lies, among other factors, on the reasonable knowledge of the clients about the risk of VAT fraud carried by their suppliers.

The French authorities recently published guidelines on what are the tests, signs and evidences that taxpayers should take into account when facing potential VAT fraud. These signs include unreasonable prices, lack of contracts or payments into foreign bank accounts required.

What is carousel fraud?

The practice, also known as Missing Trader fraud, is a way of collecting VAT from your customer and disappearing without paying that VAT to the Authorities. This fraud uses the simplifications available for VAT registration and intra-Community supplies in the EU. Carousel fraud in the EU has an estimated cost of €100 billion every year.

 

 


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