Europe

EPPO Uncovers €10M EU VAT Carousel Fraud

July 8, 2025

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As part of its investigation, which went under the code name “Midas,” the European Public Prosecutor’s Office (EPPO) in Munich arrested one suspect in Czechia and conducted several searches and seizures in four EU countries.

The EPPO first announced the result of the investigation “Midas” last year in February, when more than 180 searches were carried out and 14 people were arrested in Albania, Austria, Croatia, Cyprus, Czechia, Estonia, Germany, Hungary, Italy, Malta, the Netherlands, Poland, Portugal, Slovakia, Slovenia, Sweden and the UK, a total of 15 EU and two non-EU countries.

Facts of the Investigation

Last year, the EPPO announced that a complex criminal scheme had exploited EU rules on cross-border transactions between its EU countries, allowing suspects to defraud up to EUR 195 million since 2017. Throughout the years, the criminal organization behind the identified VAT fraud schemes created layers of shell companies, straw men, fictitious identities, and secret communication to mask their criminal activities.

It took nearly 2,5 years for EPPO to identify and link seemingly individual offenses, as well as more than 200 requests for assisting measures issued and answered by 14 European Delegated Prosecutors in 12 EU countries.

Following last year's arrest and seizure action, on July 4, 2025, it was announced that one individual had been arrested in the Czech Republic and that 18 searches had been conducted in Belgium, the Czech Republic, Germany, and Poland, resulting in the freezing of assets in bank accounts in Belgium and Poland.

The new results of the investigation revealed that a criminal organization had operated a EUR 10 million cross-border VAT carousel fraud, which included the sale of AirPods.

Conclusion

This is one of many elaborate and complex schemes that the EPPO has revealed, highlighting the fragility of the EU VAT system and how fraudsters exploit rules intended to make trade between EU countries more efficient and straightforward. However, by joining forces and cooperating with Europol and Eurojust, national Tax Authorities and governments continue to reduce the maneuvering space for fraudsters.

Source: European Public Prosecutor’s Office

What is the EPPO’s Operation “Midas” about?

Operation “Midas” is an EU-wide investigation led by the European Public Prosecutor’s Office into a cross-border VAT fraud scheme. It involved shell companies, fake identities, and secret communications to defraud the EU of around EUR 195 million since 2017.

How much money was involved in the newly revealed VAT fraud?

The latest development in the investigation uncovered a VAT carousel fraud worth EUR 10 million, specifically linked to the sale of AirPods across EU countries.

What actions were taken by authorities during the investigation?

Authorities arrested one person in the Czech Republic, conducted 18 searches across Belgium, Germany, Poland, and Czechia, and froze assets held in bank accounts in Belgium and Poland.

How many countries were affected or involved in the original investigation?

The initial phase of the investigation involved 15 EU countries and 2 non-EU countries, with over 180 searches and 14 arrests conducted across Europe.

What tactics did the criminal network use to commit the VAT fraud?

The organization created complex layers of shell companies, used straw men and false identities, and employed covert communication methods to carry out and conceal the fraud.

What does the investigation reveal about the EU VAT system?

The case highlights vulnerabilities in the EU VAT system that fraudsters exploit through cross-border transactions. It also shows how coordinated EU enforcement is essential to combating large-scale fraud.

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VAT tax researcher, specializing in delivering clear, up-to-date insights on indirect tax regulations and compliance for our website. Rasmus Laan

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Facts of the Investigation

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