French refurbisher Recommerce has raised an alarm after receiving an unsolicited offer from a U.S.-based vendor. The proposal involved routing Apple iPhones through two companies in the Netherlands under the VAT margin scheme—allegedly to avoid proper tax payments. Recommerce CEO Augustin Becquet called the proposal “unacceptable” and vowed legal action to prevent such practices from continuing in the European market.
VAT margin scheme under scrutiny
This scheme typically allows for VAT to be paid only on the profit margin when selling used goods within the EU to consumers. However, it is illegal to apply this to products imported from outside the EU. Some vendors have been fraudulently declaring non-EU imports—such as Apple iPhones from the U.S.—as intra-EU goods to benefit from reduced VAT obligations.
EPPO investigates € 14 million fraud
The European Public Prosecutor’s Office (EPPO) recently launched an investigation into a € 14 million VAT margin fraud scheme tied to second-hand mobile phone sales. The investigation led to coordinated raids in Czechia and Latvia, with five arrests made and suspects facing extradition. This marks one of the first significant enforcement actions on VAT margin fraud in the secondary mobile sector.
Unfair advantage hurts the market
Illegally applying the VAT margin scheme gives fraudsters the ability to undercut competitors on price. This not only damages legitimate European refurbishers but also deprives EU governments of critical tax revenues. Augustin Becquet urged industry players to uphold fair practices and ensure taxes are paid.
Market
Trade-in
Repair
Refurbishing
