The European Commission has unveiled new tools to make the EU's Value Added Tax (VAT) system more fraud-proof and close loopholes which can lead to large-scale VAT fraud. The new rules announced on 1 December aim to build trust between Member States so that they can exchange more information, as well as boost cooperation between national tax authorities and law enforcement authorities. The most conservative estimates show that VAT fraud can lead to lost revenues of over EUR 50 billion a year for EU Member States – money that could be going towards public investment in hospitals, schools and roads. Revelations in the ‘Paradise Papers' have again shown how tax avoidance schemes can be used to help wealthy individuals and companies to circumvent the EU's VAT rules to avoid paying their fair share of tax. Recent reports also suggest that VAT fraud schemes can be used to finance criminal organisations, including terrorists. The proposals would enable Member States to exchange more relevant information and to cooperate more closely in the fight against these activities.