EPPO Uncovers EUR 187M VAT Fraud in Electronics Trade

The European Public Prosecutor's Office (EPPO), the EU's independent public prosecution office, announced that it had uncovered a large-scale VAT fraud scheme involving the electronics trade. EPPO's office in Ostrava, Czech Republic, charged seven people as a result of the investigation known as “Záblesk” (“Flash”). The estimated loss from this VAT fraud exceeds CZK 4.7 billion (around EUR 187 million).

The Course and Result of Investigation

The EPPO's investigator, together with more than 300 officers from the Czech National Organised Crime Agency, carried out 19 searches across the country, with coordinated operations also taking place in Poland and Slovakia. Initially, ten people were arrested, of whom seven are formally charged with serious tax offences, including evasion and unlawful reduction of mandatory payments. Six of the seven accused are in custody, and one has been placed on probation with a travel ban.

All of them are suspected and charged with involvement in the import of electronic goods from countries such as Hong Kong, the United Arab Emirates, and the United States into the EU through Czech-based companies. Once imported, the Czech companies would falsely declare that they had sold the goods to businesses in Hungary, Poland, and Slovakia, but those foreign entities were merely shell companies with no real operations.

In addition to charging them for these serious offences, the authorities also seized assets worth CZK 42 million (around EUR 1.6 million), including real estate, luxury watches, and cash. The EPPO noted that this is one of the largest VAT fraud investigations ever uncovered in Czechia.

Conclusion

In its 2024 annual report, published earlier this year, EPPO stated that the total number of open investigations is 2,666, with an estimated damage of EUR 24.8 billion, where more than half, around EUR 13.45 billion, is linked to cross-border VAT fraud. 

From that perspective, the “Flash” investigation demonstrates the growing importance of coordinated, cross-border enforcement mechanisms, such as the EPPO, in combating crimes that exploit the complexity of the EU’s single market. By targeting not only individuals but also the financial networks and assets that sustain such operations, the EPPO sends a strong message that large-scale tax evasion will face a unified, robust European response.

Source: EPPO, VATabout