The European Public Prosecutor’s Office (EPPO) on Wednesday said it uncovered the first multimillion-euro VAT fraud in Croatia, involving 78 million euros ($90.27 million) in unpaid tax, highlighting cross-border coordination to disrupt large-scale tax evasion in the EU. The investigation targeted a criminal group trading in electronics and hygiene products, resulting in arrests and asset seizures in both Croatia and Italy.
In Croatia, six suspects were arrested, with pre-trial detention requested for five, and authorities froze two properties and eight vehicles worth around 650,000 euros ($752,240). In Italy, the Court of Naples froze 33 million euros ($38.19 million) in assets belonging to seven alleged leaders and 23 companies, while more than 1 million euros ($1.16 million) in real estate, luxury cars, jewellery, and cash has already been seized. Several suspects are connected to a separate VAT carousel fraud trial in Italy, while the current case targets the main network behind the scheme.
EPPO said the group operated conduit companies to record fictitious intra-EU trades, enabling VAT fraud and tax evasion. Members allegedly also provided warehousing, transport, and administrative support to conceal the scheme. The operation involved cooperation with Croatian tax and police authorities and the Italian Guardia di Finanza, with more than 110 officers searching 28 homes and offices in both countries.
