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Vienna, 12 January 2012 Successful collaboration by Austria and France in the fight against tax fraud

In October 2008, a partnership agreement was concluded by the Austrian Central Liaison Office (CLO) and the French tax investigation agency “Direction Nationale d’Enquêtes Fiscales“ (DNEF). The Austro-French agreement on intensifying the exchange of information to uncover VAT fraud now has an excellent track record of success in practice.

“Our collaboration has been progressing very well”, the head of the CLO, Ernst Radlwimmer, confirms. The Austrian and French agencies have been conducting joint investigations since 2008. The exchange of control disclosures has proven to be an effective tool in combatting tax fraud. In 2010 there were 24 cases in which information was spontaneously forwarded or an application for international assistance was filed; in 2011, this number increased to 65. In 17 cases, the agencies exchanged information relevant to the investigation and prosecution of fraud.

As part of the EU’s “ Fiscalis Programme”, a programme of international cooperation enabling national tax administrations to exchange information and expertise, French tax officials paid a working visit to their colleagues in Vienna.

“In underscoring the successful collaboration between the Austrian and French tax investigation agencies, I would like to go beyond mere statistics”, DNEF head François Trechot stated.

Austria and France have distinguished themselves within the EU by their joint efforts in the fight against VAT fraud, as the example of Eurofisc has shown. The operational structure the European Council has put in place is intended to improve cooperation by member states in the fight against organised VAT fraud, particularly MTIC (Missing-Trader Intra-Community) or ‘carousel’ fraud. Eurofisc permits anti-fraud information to be exchanged rapidly between all of the EU member states. This multilateral early warning system, intended eventually to be developed into a system of common risk assessment of intra-Community transactions, commenced operations in February 2011.

Eurofisc is made up of the following four working fields:

  • Working Field 1 (WF1): Carousel fraud in respect of products and sectors of particular risk.
  • Working Field 2 (WF2): Fraud in respect of vehicles (cars, ships and aircraft).
  • Working Field 3 (WF3): Tax fraud in connection with customs procedure 42.
  • Working Field 4 (WF4): Observation and analysis of cases of fraud.

Austria heads Working Field 3, coordinating the exchange of information in the realm of evasion of VAT on goods imported from outside the EU by means of customs procedure 42.

The application of procedure 42 can be a source of significant VAT fraud. For that reason, it is important for the authorities to be able to track transactions between member states from the moment the goods enter the EU. Austria has become noted for the high quality and quantity of information exchanged and it is regarded as the engine driving the fight against tax fraud in connection with customs procedure 42 on behalf of all 27 EU member states. In 2011, Austria transmitted more than 6000 lines of information to the other members of Working Field 3.

France heads and coordinates Working Field 1 and thus takes a leading role in the fight against MTIC or ‘carousel’ fraud. DNEF head Trechot stressed that “Austria’s constructive cooperation in this area is much appreciated, and we are particularly grateful for the consistently solid, excellent coordination with the tax officials at the CLO and the Austrian Federal Ministry of Finance”.