Title: The volume of MTIC fraud between Poland and Czechia in electronic devices trade: general method of carousel fraud estimation

Authors: Miroslav Vaškovič; Hana Zídková; Markéta Arltová

Addresses: University of Economics, Prague, W. Churchill Sq. 1938/4, 13067 Prague 3 – Žižkov, Czech Republic ' University of Economics, Prague, W. Churchill Sq. 1938/4, 13067 Prague 3 – Žižkov, Czech Republic ' University of Economics, Prague, W. Churchill Sq. 1938/4, 13067 Prague 3 – Žižkov, Czech Republic

Abstract: EU member states are discussing the phenomenon of carousel (MTIC) fraud. Existing estimates of this type of VAT evasion are sparse and the methodology behind them is unclear. This paper describes a method of how to estimate (ex-post) the MTIC fraud realised within a trade on selected goods. The analysis is based on trade balances in the selected category of goods between two member states. The main assumption is that after the implementation of the specific reverse charge mechanism the MTIC frauds on the respective goods are eliminated. The fictitious (fraudulent) supplies of goods between the member states cease to exist and the trade balance changes accordingly. The results show that the MTIC realised EUR 44-51 million profit on the MTIC fraud in international trade between Poland and Czechia with selected electronic devices in 2014 and 1st quarter 2015 (fraud measured in Czechia).

Keywords: VAT evasion; missing trader intracommunity; MTIC; MTIC fraud; estimation method; Poland; Czechia; trade balance analysis; carousel fraud; specific reverse charge; international trade.

DOI: 10.1504/IJEPEE.2024.141565

International Journal of Economic Policy in Emerging Economies, 2024 Vol.20 No.2, pp.126 - 145

Received: 19 Feb 2020
Accepted: 07 Aug 2020
Published online: 24 Sep 2024 *

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