Value Added Tax (VAT) fraud

Value Added Tax (VAT) fraud occurs when businesses manipulate the VAT system to evade paying the correct amount. This often involves tactics like missing or falsifying invoices, creating fake companies, or transferring goods and services across borders to exploit loopholes. The goal is to claim refunds or reduce tax liabilities illegitimately, leading to significant losses for governments and consumers. VAT fraud undermines the tax system’s integrity and can distort fair market competition. Authorities continuously develop methods to detect and prevent such schemes to ensure proper tax collection.