The European Commission plans to introduce EU-wide automated exchange of VAT information and to grant access to these data to European Anti-Fraud Office (OLAF) and the European Public Prosecutor’s Office (EPPO). Although this may appear to be a purely technical change, it could have far-reaching implications for all taxpayers operating in the EU, including companies based in Poland.
For Polish entrepreneurs, this means that risk assessments will need to consider not only domestic law-enforcement authorities, but also an EU-level prosecutor with access to cross-EU datasets and advanced analytical tools.
New Data-Access Powers
The European Commission has proposed amending Council Regulation (EU) No 904/2010—a seemingly modest legal act that governs the procedures and rules for exchanging VAT information among Member States. Until now, such exchanges largely occurred upon request by a Member State’s tax administration.
While the framework also allowed for certain automated exchanges, EU-level bodies tasked with combating VAT fraud—such as EPPO and OLAF—did not enjoy easy access to these systems. They typically had to request information directly from Member States, a process that took time.
As a result, EU-level efforts to combat VAT fraud were often inefficient. Frequently, by the time OLAF or EPPO assembled sufficient information, fraudsters had already changed their modus operandi, making identification extremely difficult. The consequences are obvious: significant budget losses. According to the European Commission, intra-EU fraud schemes involving “missing traders” alone may have caused losses of up to €33 billion.
The proposed amendments aim to strengthen EU enforcement by creating a platform for automated VAT data exchange accessible also to OLAF and EPPO. Access would cover a broad range of data, including intra-Community transactions and VAT numbers (VIES), VAT-exempt imports (SURVEILLANCE), and payment information (CESOP).
The reforms also strengthen Eurofisc—a dedicated network of Member State liaison officers established to fight VAT fraud. The changes would require Eurofisc coordinators to share all analyses and information indicating suspected VAT crimes with OLAF and EPPO.
It appears that building a comprehensive database of exchanged information may also be a first step toward automated analytics and fraud detection, potentially using advanced software or AI.
Not Only a Blow to Fraudsters
At first glance, these changes seem aimed squarely at dishonest companies and organized criminal groups engaged in VAT fraud across the EU.
However, looking at the broader picture and potential implications, it is clear they may also significantly affect honest taxpayers—especially those who unknowingly become entangled in VAT fraud chains.
Analyses conducted by Eurofisc, OLAF, or EPPO are likely to be included in case files handled by Polish tax authorities and prosecutors. Why does this matter?
Because a draft law of 4 August 2025 amending the Tax Ordinance Act and certain other statutes (register no. UD196) is currently under consideration. Among other things, it proposes changes to the Fiscal Penal Code that could allow the State to pursue payment of taxes via fiscal-criminal proceedings even after the tax liability has become time-barred.
Proceedings initiated, for example, on the basis of an OLAF notification containing such analyses could begin seven years after a transaction. By then, the tax claim itself would be time-barred, and the entrepreneur might no longer possess relevant documentation. This raises serious questions: How can the taxpayer defend themselves? Can they verify the analyses and data shared with Polish authorities without documents and after so much time? Ultimately, can they effectively challenge the findings?
In short, can a taxpayer mount an effective defense if EU-level data indicate their involvement in a chain used for VAT fraud—despite a lack of criminal intent?
Experience also shows that errors and omissions occur in information exchanges between tax authorities of different countries. Such errors may filter into EU-level analyses shared by OLAF or EPPO and could materially affect a taxpayer’s procedural position. Demonstrating these errors without source documents will undoubtedly be difficult.
If the planned amendments to the Fiscal Penal Code do enter into force, one can only hope that the Polish legislator will implement adequate safeguard mechanisms enabling taxpayers to defend themselves in such cases. Time is short: most provisions of the draft regulation are intended to apply from 1 September 2026.
EPPO: Mandate and Organization
The European Public Prosecutor’s Office (EPPO) was established by Council Regulation (EU) 2017/1939 pursuant to Article 86 TFEU as a specialized prosecution service competent to investigate and prosecute crimes affecting the EU’s financial interests—including the most serious cross-border VAT fraud.
EPPO’s jurisdiction includes serious VAT offenses exceeding €10 million, provided they involve intra-EU trade between at least two Member States. Given the scale of VAT fraud uncovered in Poland, this threshold is not particularly high.
Structurally, EPPO operates under a two-tier model: a central level with a College of European Prosecutors from each participating state, and a national level with European Delegated Prosecutors conducting investigations on EPPO’s behalf within Member States. This model aims to ensure uniform practice across the EU while leveraging local expertise and infrastructure.
In Poland, offices of European Delegated Prosecutors operate—or are being established—in major economic centers, including Warsaw and Upper Silesia. These units will conduct key investigations into VAT carousel fraud, question suspects, order asset freezes, and file indictments before Polish courts on behalf of EPPO.
How EPPO Conducts VAT Investigations
In practice, EPPO focuses on cases where traditional national tools prove insufficient—typically multi-layer VAT carousels involving dozens of companies across several countries, fictitious supply chains, and large-scale use of fake invoices. Well-known cases follow a familiar pattern: a central entity in one country, a series of “buffers” in others, rapid trading in electronics, software, or other easily resold goods, and ultimately a missing trader that fails to remit VAT.
Procedural Foundations: A Hybrid Model
Regulation 2017/1939 establishes a hybrid procedural model. EPPO applies its own procedural rules first (e.g., on opening cases, allocating competence between central and delegated levels, and cooperation with Eurojust and OLAF). For matters not regulated at EU level, national law applies.
In Poland, this means applying the Code of Criminal Procedure to coercive measures, deadlines, procedural forms, and remedies—unless the Regulation provides otherwise.
From a defense perspective, key provisions concern evidence (Articles 37–39) and procedural safeguards for suspects, including the right to counsel, an interpreter, information on charges, and access to the case file. The admissibility of evidence before national courts is assessed under national standards, with the Regulation aiming to ensure that evidence gathered in one Member State can be used in another without additional formalities.
Consequences for Polish Taxpayers
For taxpayers—especially those engaged in intra-EU trade—the risk of VAT carousel exposure increases, even without criminal intent. EPPO actions based on aggregated EU data may accelerate the identification of alleged abuses.
As a result, entrepreneurs may find themselves defending against EU-level analytical findings, often without full source documentation. This can hinder verification of data accuracy and reconstruction of events, weakening the defense and placing greater emphasis on ongoing compliance procedures.
It is therefore essential to be aware of EPPO’s existence and the procedural guarantees provided by EU regulations and national criminal law. Proper use of these safeguards can be decisive in criminal proceedings conducted by European prosecutors wielding expanded powers.
Article by the Tax Committee of the BCC
Authors: Michał Borowski, Wojciech Pławiak, Grzegorz Panek
Source: https://ceo.com.pl/prokuratura-europejska-zyska-dostep-do-danych-o-oszustwach-vat-91203
