International VAT fraud network dismantled with arrests in Bulgaria and Germany

On September 16, 2026, authorities from Cyprus, Austria, Bulgaria, and Germany carried out a coordinated international operation led by the European Public Prosecutor’s Office (EPPO) to dismantle a large-scale VAT fraud network. The scheme involved the illegal sale of mobile phones, causing an estimated €15.7 million in tax losses by misusing VAT margin schemes intended for second-hand goods on new products.

During the operation, investigators arrested four individuals: three in Bulgaria and one in Germany. Furthermore, judicial authorities issued orders to freeze assets worth approximately €20.5 million belonging to two suspects and two involved companies. In Cyprus, law enforcement officials searched five companies and one private residence in Nicosia and Larnaca, seizing various documents and electronic evidence. The perpetrators allegedly operated a cross-border trade network with companies spread across the involved nations to evade VAT payments on online sales in Germany.

Investigations remain ongoing as authorities analyze the seized data and conduct interviews to determine the full extent of the operation. The authorities continue to examine the roles of various corporate entities suspected of facilitating these illicit transactions.