Value added tax has been one of Europe's most successful inventions, spreading to more than 130 countries over the last 50 years. So it is all the more galling that Europe's own VAT system has descended to a state of crisis. Fraud and other VAT abuses are now robbing European governments of one euro out of every ten.

EU governments are under particular attack from scams that exploit the absence of borders controls and the tax-free status of cross-border trade. This fraud – known as “missing trader” or “carousel” fraud – is responsible for the theft of billions of euros ever year.