1. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Stichting Europese Fiscale Studies wenst u van harte welkom Deze presentatie is na afloop van het seminar te downloaden op onze website: Uw dagvoorzitter: Prof. dr. H.A. Kogels Erasmus Universiteit Rotterdam

2. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Alexander Wiedow European Commission, Director for indirect taxation and tax administration Customs fraud and VAT fraud Similar or different? Or both?

3. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Customs fraud:  financial aspect (pay less)  (classification, preferential origin certificates etc)  gain market access  (specific authorisations, quota etc)  avoid standards, health- or security legislation  (counterfeit, dangerous goods etc)

4. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Crucial concepts: Security related issues (incl. counterfeit): either detected on importation or damage is done Financial aspects: similar to fiscal aspects as ex post control (audits) possible but competitive disadvantage for others difficult to repair

5. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Continuously growing figures of importation (80M declaration in 2006)  no perfect control at entry possible. Possible long term solutions: risk management with priority given to security single window to bundle information and various controls fiscal issues: in addition audits and elimination of incoherent tariffs

6. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl VAT shortfalls  “missing trader” fraud  cheating on deductions  disappearing without handing over VAT collected to Fisc  insolvencies?  fake exports  black economy

7. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Make system more robust but how?  more obligations on business to allow better check of more complete info?  link payments and deduction?  forget invoices as basis for deduction?  tax intra EC-supplies (at departure or arrival)?  general reverse charge?  reinforce customs procedure (export)  reinforce after import the follow up of the circulation of the goods ?

8. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Just improve working of current system?  by increasing administrative cooperation (EU agency)?  better administrations (better risk management, better/quicker control)?  partnerships with legitimate business (label of trust for active co-operation)?  more harmonisation also of operational issues (VAT identification, control rhythm etc)?

9. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Ferdinand Raud Personal Mission: MMWOPS

10. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Make Money While Other People Sleep

11. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Henk Wildeboer Corporate Fiscal, Philips International BV Consequences for legitimate business

12. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Subjects VAT fraud –Types of revenues loss Whose issue? Consequences for legitimate business How to combat fraud?

13. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl VAT FRAUD Types of revenue loss: Bankruptcy –on purpose –because of market developments Usual black economy Missing trader –VAT is charged but not reported/paid Carrousel fraud –Fake “exports”

14. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl VAT Fraud: Whats new? The current missing trader fraud and carrousel fraud is pan European and “very well organized”

15. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Whose issue? This is not only a government and/or business issue! This is a society issue!

16. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Consequences for legitimate business Fraud leads to –market distortions : no level playing field –abuse of goods and brand : brand image Create awareness to avoid to get involved Anti fraud legislation: –Reverse charge in UK : system changes! –Joint and several liability : uncertainty! Fair? –More reporting, change of the VAT system …………??

17. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl How to combat fraud? 1.Business should report as much as possible? 2.Change the system of VAT? 3.Government should perform targeted audits based upon risk management?

18. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl VAT fraud: how to continue? Create trust, relations and partnerships with all the stakeholders in the (EU) society. Improve information/knowledge management e.g.: –Information is with the supplier, the customer, the banks, the advisors, the transport companies, forwarders etc. etc. –Improve VIES for government a tool for a better risk management approach for business a tool to rely on (SAFE HARBOUR) –Better administrative cooperation (proper exchange and use of relevant information) –“TAXinterpol”? Proper resources Audits based upon risk management

19. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Pauze

20. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Redmar Wolf Baker & McKenzie Case Law Struggling with carousel fraud

21. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl The first carousel... customer supplierexport refund 9% import levy 4% intermediary

22. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Export refund > levy on import creating transactions to exploit difference Dutch court rejects export refund – fraus legis (1968) ECJ rejects export refund - abuse (Emsland- Stärke GmbH, C-110/99, 2000)

23. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl The goods… 0% VAT 19% VAT MT a.k.a. ploffer

24. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl The VAT... Tax Man Refund? ringmaster on the beach MT a.k.a. ploffer

25. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Challenge the refund bubble memory boards - Benelux (1988-1992) fictitious transactions – schijnhandeling proof of awareness fraus legis? – no tax profit; transactions do not lower the tax due (BNB 1998/35 and BNB 1998/36)

26. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Challenge the refund formalities, invoicing requirements supplier does not exist... if ‘well’ structured, refund must be paid out 2003: introduction of joint and several liability

27. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Consultation of ECJ transactions within the carousel lack economic purpose (UK) transactions with MT are void (Belgium) joint and several liability EU proof?

28. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Consultation of ECJ Bond House / Optigen / Fulcrum 12 January 2006 FTI 11 May 2006 Kittel / Recolta 6 July 2006 Teleos & Colleé & Twoh 27 September 2007

29. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Optigen / Bond House/Fulcrum

30. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Goods news for traders... transactions in carousel are not outside scope vat right to deduct prevails, even when agreement is legally void

31. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl ECJ offers a certain protection… … only for traders who take every precaution which could reasonably be required of them to ensure that their transactions are not connected with fraud, be it the fraudulent evasion of VAT or other fraud

32. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Goods news for customs... know or should have known about fraud... no refund based on objective factors

33. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl ECJ on activities of missing trader... the objective criteria which form the basis of the concepts of ‘supply of goods effected by a taxable person acting as such’ and ‘economic activity’ are not met where tax is evaded by the taxable person himself

34. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Refund / zero rate every precaution... does not know or should have known... every precaution?

35. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Carla van Rijn Tax Authorities, FIOD-ECD VAT Carrousel Fraud

36. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl A (GB) B (NL) C (NL)

37. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl We fight VAT-fraud Fraudsters adjust and change their strategy

38. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl

39. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl

40. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl

41. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Principle Olympic rings Deliveries from one to the other organisation

42. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl

43. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl

44. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl

45. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Deny zero rate if you do not know with whom you are trading Your delivery must be submitted to ICA in other member state do not trade with strawmen

46. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Kittel en Recolta Know or should have known And we will wait for the reaction..

47. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Handelsblatt, 03-08-2005 Organisierte Kriminalität nutzt Schwächen gezielt aus Rechnungshof: Leichtes Spiel für Steuerbetrüger Der Bundesrechnungshof kommt in einem vertraulichen Prüfbericht für das Bundesfinanministerium zu dem Ergebnis, dass Umsatzsteuerbetrug in groBem Stil im “Rahmen Organisierter Kriminalität und häufig gepaart mit anderen Delikten begangen wird." Der 100 ‑ seitige Bericht, der dem Handelsblatt vorliegt, nennt als Beispiele Insidergeschäfte, Anlagebetrug, Geldwäsche, Verbrauchsteuerhinterziehung und sogar die Terrorismusfinanzierung

48. Seminar 29 Januari 2008 VAT & Customs Fraud www.europesefiscalestudies.nl Dank u voor uw aandacht Heeft u nog vragen? Deze beantwoorden wij graag tijdens de borrel Han Tijnagel Coördinator TDB Han.tijnagel@europesefiscalestudies.nl Klaas Meenhorst Coördinator TDOU Klaas.meenhorst@europesefiscalestudies.nl Sjoerd Janssen Coördinator TIB Sjoerd.janssen@europesefiscalestudies.nl