ITC Malta 2025 VSK: VAT compliance as business insurance

Vogel, Sprinkle & Kollegen (VSK) used ITC Malta 2025 to spotlight the legal and financial risks of VAT carousel fraud, and why rigorous tax compliance now functions as essential business insurance for traders.

Key takeaways

• Compliance protects margin: The cost of controls is far lower than the risk of denied input VAT, penalties, or frozen cashflow.

• MTIC/carousel risk persists: Even audited companies can be exposed via counterparties, weak documentation, or broken supply-chain links.

• Evidence wins audits: End-to-end trails (commercial checks, transport proof, IMEI mapping) are decisive with tax authorities.

At ITC, VSK outlined practical red flags and a working due-diligence checklist for phone trade flows, covering supplier/buyer vetting, transport and movement evidence, and documentation standards aligned with returns and RMA processes.

“Tax compliance is no longer just a cost – it’s essential insurance against the collapse of your business.” - Dr Fabian Keller, LL.M.

This session emphasised how straightforward controls, verifying VAT numbers (e.g., via official registries), matching IMEI/serials to invoices, keeping CMR/airway bills, and documenting 7/14-day returns, can deter fraud exposure and speed audits.

What it means for traders

• Adopt a written KYB/KYC checklist (company registry, VAT status, beneficial ownership, bank match) for every counterparty.

• Maintain evidence packs: contracts/POs, invoices, payment proofs, IMEI lists tied to invoices, and transport documents (CMR, AWB, delivery notes).

• Align returns windows (7/14-day) with credit notes and stock movements so VAT and inventory records stay in sync.

• Define SLAs for grading, accessories, data wipe, and RMA to reduce disputes that complicate VAT positions.

• Schedule periodic controls reviews with your advisor; document updates and staff training.

Read the full feature (PDF)

First published in the ITC Delegates Directory (June 2025). Updated for web on 22 August 2025.

If you have specific VAT questions for a live transaction, seek advice from your tax/legal advisor; the notes above are general guidance, not legal advice.

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