VATF23530 - What is VAT fraud?: examples of different types of VAT fraud: missing trader intra-community (MTIC) fraud: acquisition fraud

Acquisition fraud involves the purchase of goods or services from another EC Member State and the sale to a final consumer. In many cases the route the goods or service take is different to the audit trail (invoices). It involves a defaulter and usually buffers.

An example of acquisition fraud

The attached diagram (word 33.5 KB)  shows how acquisition fraud works and will assist you in understanding the following example.

• Company A, a UK VAT registered taxable person, purchases goods from an entity in another EC Member State. It sells these goods on to Company B, another UK VAT registered taxable person, but does not declare or pay its VAT liability. 
• Company B sells the goods to the general public, reclaiming the VAT charged to it by Company A and declaring the VAT it charges.