Odd Lots · Monday, September 7, 2026
Oliver Bullough described carousel fraud, or Missing Trader Intercommunity Fraud (MTIC), as an elaborate scheme exploiting a flaw in the EU's VAT system where goods could be imported without VAT, sold domestically with VAT, and then re-exported, allowing the claim of VAT that was never paid. This fraud, initially discovered in the UK, has since spread across Europe, costing an estimated 50 billion euros annually.
“And essentially, if you import a product, let's say from Ireland, if you're in the UK, and then you don't pay VAT on that trade because you've imported it, right? So no taxes paid. you then sell it to another shell company, which is controlled by you, but it looks like a different company in the UK. You charge VAT on that trade.”
“So essentially you export it, but without ever having paid paid it in the first place, you're essentially claiming back VAT that you never paid. So it's called missing trader intercommunity fraud because the trader that is supposed to pay the VAT to the treasury just vanishes. They go missing and they never pay it.”
“And it started off as just this very simple transactions. And then as the tax authorities picked up on that, they became more and more complicated with different chains of shell companies going in all directions and incredibly complicated.”