EPPO
The European Public Prosecutor’s Office (EPPO) in Frankfurt (Germany) and Milan (Italy) has dealt a major setback to networks operating cross-border VAT fraud schemes linked to the sales of thousands of second-hand luxury cars, causing estimated losses of €100 million.
Under the EPPO-led investigations, code-named ‘Vortex’, around 80 searches were carried out yesterday in Bulgaria, Croatia, Germany, Italy, Latvia, Luxembourg and Poland, supported by 500 law enforcement agents (tax and police officers). Six individuals were arrested In Germany and Italy.
In addition, seizing orders of over €20 million were executed. In Italy alone, 50 bank accounts were frozen and 14 properties were seized, as well as two plots of land and 25 cars, including 19 luxury vehicles. Two cars, cash and luxury items were also seized in Germany, and bank accounts were frozen.
The criminal groups under investigation are suspected of involvement in large-scale VAT carousel fraud – a complex scheme that exploits EU rules on cross-border transactions between Member States, which are exempt from value-added tax (VAT).
According to the investigations, several thousands of cars were sold within cross-border fraud schemes all over Europe, using hundreds of shell companies, forged documents and fictious invoices, in order to evade the payment of VAT. In some cases, the vehicles were fictitiously sold to companies in Liechtenstein and San Marino, where the cars were never registered, before they were actually sold to car dealers and customers in Italy and other Member States.
In addition, the VAT fraud carousel allowed the criminal network to claim VAT reimbursements from the national tax authorities, to which the alleged perpetrators were not entitled, all leading to substantial illicit profits.
It is understood that the criminal groups also fraudulently applied reduced VAT, under the so-called ‘margin taxation scheme’. This provision allows resellers to pay VAT only on their profit margin (the difference between the price paid for the item and the price for which it is sold), when selling second-hand goods bought from private individuals. However, the companies under investigation applied this provision unlawfully.
It is estimated that the activities under investigation have caused losses of at least €100 million to the EU and national budgets.
These investigations were supported by Germany’s Tax Investigation Office in Stuttgart (Finanzamt Stuttgart II – Steuerfahndungsstelle) and the Italian Financial Police (Guardia di Finanza) of Varese, as well as Italy’s Customs and Monopolies Agency of Bolzano (Agenzia delle Dogane e dei Monopoli di Bolzano).
The investigations also counted on the support of Europol, through analytical assistance and coordination tools, with additional backing from national law enforcement agencies – highlighting the value of cross-border cooperation against organised crime.
All persons concerned are presumed to be innocent until proven guilty in the competent courts of law.
Tipologia: Comunicato
Data: 03/07/2025
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