VAT Fraud at the EU Level in Croatian Criminal Law and Practice

Abstract

This paper examines the subject of VAT fraud in Croatian criminal law and practice, focusing particularly on two main points: the first part of the paper tackles the definition and possible modalities of VAT fraud and the theoretical and practical challenges in criminalising these offences
in European and national criminal legal systems. The second part of the paper presents a review and analysis of available data gathered from the Office for the Suppression of Corruption and Organised Crime at the State Attorney’s Office and the EPPO regarding cases of VAT fraud
prosecuted in the Republic of Croatia from 2013, when Croatia joined the EU and thus became susceptible to EU level VAT fraud, to the present day. Particular attention in the analysis is devoted to limitations for the successful prosecution of VAT fraud in Croatia due to the shortcomings
of transposing EU legislation, foremost the PIF Directive, into the national criminal code. The paper also discusses the dynamics and the financially relevant extent to which the cases in question relate to documented amounts of damage (depicted by the VAT gap parameters) for national
and European budgets resulting from VAT fraud. Some points of focus regarding the problems identified in the analysis are discussed and possible future steps suggested for the advancement of the response of national criminal law to the ever-growing threat of VAT fraud for both national and European financial interests. The proposed measures represent the minimum action necessary
for an organised, sensible, and efficient approach to battling one of the most lucrative (and thus most damaging) forms of organised crime in the EU.