Kathimerini Greece Newsroom
A major European investigation into an alleged €46.9 million VAT fraud scheme has put a network of companies with links to Cyprus under scrutiny, with authorities looking into how small electronic devices may have been used to move millions of euros through a complex tax fraud operation.
The investigation, led by the European Public Prosecutor’s Office (EPPO), focuses on what is known as a “carousel fraud” scheme, one of the most complicated forms of VAT fraud in the European Union.
While the case is still under investigation and no arrests or prosecutions have been announced, authorities say the alleged scheme involved companies operating across Greece, Cyprus, Bulgaria and the Czech Republic, carrying out cross-border transactions involving electronic products.
For Cyprus, the case highlights the challenges faced by EU countries in policing international business networks that can move money and goods across borders in a matter of hours.
How does a VAT carousel fraud work?
The system allegedly used a loophole in EU VAT rules that allows companies trading goods between member states to avoid paying VAT at the point of transfer.
In a typical carousel fraud, goods are repeatedly bought and sold between companies in different countries. Some businesses in the chain, often called “missing traders," disappear without paying the VAT they owe, while others may claim tax refunds for VAT that was never actually paid.
The goods may exist and the transactions may appear legitimate on paper, making these cases difficult to detect.
According to EPPO, the alleged activity took place between 2021 and 2025, resulting in losses of at least €46.9 million to Greek and European public funds.
Authorities are also examining another €24.2 million in transactions where there are indications that VAT may not have been properly paid or declared.
Why this matters to Cyprus
Cyprus has long been a hub for international business due to its location, EU membership, and financial services sector. Thousands of legitimate companies operate through the island, especially in areas involving trade and cross-border services.
However, cases like this also underline why European authorities continue to strengthen checks on companies involved in international transactions.
For ordinary citizens, VAT fraud is not just a business crime. Lost tax revenue can mean fewer funds available for public services, infrastructure, and government programs.
Cash, luxury cars and digital assets seized
During raids carried out in Greece last week, investigators searched company offices and the homes of executives linked to the investigation.
Authorities seized large amounts of documents, accounting records, and digital evidence. They also confiscated:
- €99,000 in cash
- three luxury vehicles
- cryptocurrencies worth around €900,000
- other digital assets valued at approximately €4.5 million
Greek authorities described the cryptocurrency seizure as the largest digital asset confiscation operation carried out in the country so far.
Investigators said specialized digital forensic tools helped them trace assets hidden across complex online systems.
Investigation continues
The European Public Prosecutor’s Office said the investigation remains ongoing, with authorities also examining possible money laundering offenses.
No information has been released regarding arrests or charges at this stage.
The case is being handled with the assistance of Greek law enforcement and digital forensic specialists as authorities continue to examine the companies, transactions, and financial movements involved.
