New ‘Super Weapon’ Against VAT Fraud In Europe
The Transactional Network Analysis (TNA), a Belgian data mining software with intuitive algorithms which quickly assesses multiple international databases and reviews huge amounts of data pointing out suspicious VAT activity and likely cases of fraud.
Whilst this is nothing new for the Belgian tax authority the BBI, where the software has been successfully used since 2002. In this time, they have managed to reduce the damage caused by VAT carousels in Belgium from €1.1 billion in 2001 to under €45 million in 2018, an impressive 96% reduction in just 15 years.
In the early 2000’s the Belgian tax authorities started to study the way in which VAT carousels and fraudsters operate. Off the back of this research, the tax authority invested in data mining using algorithms to detect suspicious transactions that indicate a VAT carousel can be uncovered very quickly. This meant that they could intervene quickly, and importantly, before the damage to the countries treasury increases.
It is estimated that EU member states lose around €50 billion each year to organised crime gangs and VAT carousels. The EU leaders are hoping the ‘Super Weapon’ success seen in Belgium will be replicated on a European-wide scale. It is estimated the in the second half of the year the software will be used by all European states.