The Latest IOTA Report on the Use of Alternative Payment Systems in Cross-Border VAT Fraud Schemes Now Available Online
IOTA is pleased to announce its latest publication, the IOTA Report on the Use of Alternative Payment Systems in Cross-Border VAT Fraud Schemes, created by a dedicated Subgroup within the IOTA Forum on Combating VAT Fraud. The Report was successfully finalised in November 2025.
In recent times, cross-border VAT fraud has become a significant issue, often associated with organised crime. These schemes exploit gaps and inconsistencies in international VAT rules, heavily relying on Traditional and Alternative Payment Systems (APS) to hide the origins of illegal funds and integrate them into the legitimate economy. Technological advances have made APS more accessible, increasing transaction speeds and risks. As fraud strategies grow more sophisticated, quick access to cross-border financial data is vital, yet current systems often struggle to handle the volume and complexity of this data.
To address this, the IOTA Forum on Combating VAT Fraud appointed a special Subgroup in 2023, acknowledging the crucial role of APS in facilitating these schemes. In November 2025, their findings were finalised, leading to the publication of a comprehensive report.
International Taxation Expert Massimo Morarelli led the project from the IOTA Secretariat, who monitored overall progress and promoted effective collaboration among members. The IOTA Subgroup was managed by So Young Kim from Norway, who provided strategic guidance throughout the project’s development, ensuring activities stayed aligned with its goals and aims. The Subgroup's work was enriched by the expertise of a diverse group of specialists from IOTA member tax administrations, including Julia Klopfer and Simon Klopfer from Austria, Pieter Vercruysse and Pascal Beaujeant from Belgium, Raita Melasniemi from Finland, Dr Emese Túri from Hungary, João Nunes Fialho from Portugal, Róbert Píš from Slovakia, Gareth Marklew from the United Kingdom, as well as representatives from International Partner Organisations of IOTA, such as Bruno Freitas from EUROPOL and João Marques from the European Public Prosecutor’s Office (EPPO).
Their teamwork produced a detailed analysis of tax administration challenges, along with practical recommendations. The project promotes knowledge exchange among IOTA members and aims to improve strategies for collecting and analysing transactional data from new money transfer systems.
The final report summarises their findings and offers insights into countering threats posed by APS in cross-border VAT fraud. This effort marks a major step toward enhancing defences, protecting tax revenue, and maintaining the integrity of cross-border financial systems.
IOTA member tax officials can access the reports via the link below:
IOTA expresses sincere gratitude to all subgroup members and participating tax administrations for their dedication and expertise in bringing these projects to fruition.
