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. Last Updated: 07/27/2016

EU Ministers Target Tax Fraud

BERLIN -- EU finance ministers discussed ways of tackling the growing sales tax fraud that is costing their governments billions each year and also debated whether to place hedge funds under stricter rules.

A second day of talks Saturday among 27 European Union nations focused on what can be done to curb value added tax fraud, which leaches an estimated $82 billion to $272 billion from their treasuries every year.

Governments usually charge VAT to all customers in the supply chain, offering refunds to business-to-business buyers. But some criminals exploit the difficulty countries face in tracking transactions in other nations by wrongly claiming refunds for tax they have never paid elsewhere or by disappearing with the VAT collected from customers.

More trade in easy-to-transport, high-value items has seen this problem grow. Britain is keen to change the way it taxes these items and will start only charging tax to the final customer for these products.

But Germany and Austria want to charge VAT to the final customer for all purchases over ?5,000. The EU executive has been resistant to this, as it would mean major changes for Europe's existing tax systems.

EU Financial Services Commissioner Charlie McCreevy has said he sees no need to regulate hedge funds, but Economic and Monetary Affairs Commissioner Joaquin Almunia said hedge funds caused concern as more consumers were investing in them.