EU – Commission Proposes Enhanced VAT Data Sharing and Cooperation to Combat Cross-Border Tax Fraud

On November 13, 2025, the EU Commission presented a proposal to amend the current framework for tax data sharing, based on cooperation between EU institutions at the central level and Member State institutions. This type of cooperation mainly covers data sharing among the European Public Prosecutor’s Office (EPPO), the European Anti-Fraud Office (OLAF), and Member States. 

This amendment is a necessary step, upon which(if adopted) a new regulatory framework for cross-border VAT data sharing shall be established. This proposal is part of a multi-layered tax reform that the EU Commission is bringing forward first. 

The possibility for EU institutions to access and exchange VAT data with respective institutions of each Member State, shall unquestionably increase the number of tax audits, decrease the level of cases in which the taxable persons report less VAT than they should, or they don’t report it at all. 

This proposal aligns with the EU’s VAT in the Digital Age (ViDA) reform. The modification of the current regulatory framework on the EU’s Data Sharing and administrative cooperation is a necessary and logical step that will naturally lead to broader policy updates. 

This Commission’s proposal, if accepted, will permit EPPO and OLAF real-time access to VAT data, enabling their members to conduct in-depth tax assessments and significantly reducing the risk of losing the tracks that will eventually lead to offenders.

The enhanced, less-fragmented collaboration, which occurs in sync, will serve not just the central EU institutions in reducing the number of multi-million EUR carousel fraud cases, but will also be highly useful to the revenue authorities of the Member States in identifying businesses, owners, and other stakeholders involved in these frauds. 

This more efficient cooperation between EU institutions has a common goal: reducing the VAT gap, strengthening the fight against fraudsters, and providing greater protection for compliant taxable persons. 

The pending implementation of various tax technology tools, with a common aim of reducing the VAT gap, will inevitably lead to more audits and fewer opportunities to find a “safe shortcut” to avoid paying owed tax, skipping VAT registration, or committing other tax offenses. 

With more “power” at their disposal, EU authorities, as well as Member State revenue authorities, will unquestionably get a higher level of “insights” into the transactional data. Taxable persons should take this into account and comply with all requirements.