Romania faces 9 billion euro annual loss to VAT carousel fraud

Tax Institute Romania estimates that carousel fraud—a complex VAT evasion scheme involving circular trading of goods across EU borders—costs the Romanian economy approximately 9 billion euros annually.

In this scheme, shell companies exploit intra-community trade exemptions by selling goods between countries without paying VAT, while other companies in the chain claim fraudulent refunds from the state budget. Andreea Nica, Vice President of CFA Romania, noted that over 20% of work in Romania is estimated to be undeclared or untaxed.

In contrast, Romanian Finance Minister Alexandru Nazare has highlighted improvements in tax collection, stating that the country saw an additional 13 billion lei in VAT revenue compared to the previous year, attributing the surplus to digitalization and improved oversight by the National Agency for Fiscal Administration (ANAF).