Missing Trader Quick Check: Eight questions for your purchasing

Eight questions. Three minutes. Clarity.

Nobody joins a VAT carousel on purpose — but auditors read daily business backwards, and then patterns count. This quick check shows in three minutes whether your purchasing sees signals that authorities read as warning signs — and whether you could explain them. An orientation tool, not a verdict: no legal advice, no rating of your company — eight patterns, evaluated entirely in your browser.

How the check works

You answer eight questions with Yes, No or Don’t know — no scales, because purchasing rarely comes with decimal places. Your result appears immediately as a traffic light, computed locally in your browser; not a single answer is transmitted. Depending on the colour, we suggest the next step — compact guide, confidential call-back or emergency line. In three minutes you see where the risk sits.

The traffic light rates your answers, not your company. It does not replace a review of your individual case.

What the result means

Green means: no conspicuous pattern. The right move now is to preserve it — document what your purchasing already does right; today’s green only protects if it is provable tomorrow.

Amber means: individual signals or blind spots. Do not stop — clarify: talk to the partner, review the facts, write a short note. Most amber findings turn out harmless; the note proving that later is the real value. Eight “don’t knows” is also amber: missing visibility is a finding, not an alarm.

Red means: signals have accumulated. Not a finding of guilt — but the moment to pause and put things in order before others ask the questions. Sequence beats haste: change nothing retroactively, secure documents and decision trails, then clarify by priority — via the emergency line.

Why these questions

The eight questions are not invented — they are distilled from what case law, administration and investigative practice have described for years as typical features of missing-trader chains.

The legal frame is set by the European Court of Justice: since Kittel and Recolta Recycling, a trader loses the input VAT deduction and the exemption if he knew or should have known that his transaction was connected with VAT fraud. At the same time, the case law draws an often overlooked line: in Mahagében and Dávid, the Court made clear that nobody may be turned into the investigator of his entire supply chain — general enquiry duties without indications are impermissible, and the authority bears the burden of proving constructive knowledge; presumptions are not enough. What nobody may ignore are the indications visible in daily business — exactly what this check asks about.

Which signals those are is no secret science — the warning signs sit on four source layers, every one of them open to be read. First, the German Federal Ministry of Finance circular of 15 June 2022 on Section 25f UStG, which in paragraphs 15 et seq. names the circumstances that, from the administration’s perspective, can point to involvement — strikingly low prices without a market explanation, pre-arranged buyers and ready-brokered deals, unusual payment routes via third parties, missing business substance. Second, the VAT Application Decree (UStAE), which entrenches this line permanently in section 25f.1 and thereby makes it binding for every audit. Third, the criteria catalogues that field auditors and the tax fraud investigation units work with internally — checklists of objective suspicion indicators, as documented in the compliance literature. Fourth, the typology papers of the Financial Intelligence Unit, which describe the same patterns from the money-laundering and investigative perspective: short trading legs with minimal margins, circulating goods, changing companies behind unchanged individuals, contact only via mobile numbers. For the classification, one thing is decisive: none of these lists establishes guilt — they establish grounds for review. A hit on an authority’s list is not proof of constructive knowledge; it is the point at which your documented clarification begins.

The check translates these catalogues into eight everyday questions — weighted by what auditors treat as most serious: price, packaged deals and payment routes count threefold, the rest twofold. “Don’t know” counts only one point: a blind spot is not a warning signal, but an instruction to look. The logic is the defence logic: seeing signals does not make you guilty; seeing, clarifying and documenting them makes you prepared. Only seeing and ignoring them creates the later problem — a recognised warning signal without documented clarification is hard to explain in hindsight. The underlying chain mechanics are explained on our pages on VAT carousel fraud and the position of the honest buffer.

Source box

Legal status: 7 July 2026. Full citations for the legal statements made in the text.

• ECJ, judgment of 6 July 2006 — C-439/04 and C-440/04, Kittel and Recolta Recycling, ECLI:EU:C:2006:446, para. 56 et seq. (knowledge or constructive knowledge standard).
• ECJ, judgment of 21 June 2012 — C-80/11 and C-142/11, Mahagében and Dávid, ECLI:EU:C:2012:373, para. 61 et seq. (limits of enquiry duties).
• ECJ, judgment of 1 December 2022 — C-512/21, Aquila Part Prod Com, ECLI:EU:C:2022:950, para. 52 (burden of proof; no presumptions).
• Section 25f German VAT Act (UStG); Federal Ministry of Finance circular of 15 June 2022 — III C 5 - S 7429-b/21/10003 :001, BStBl I 2022, 1001, margin notes 15 et seq. (catalogue of indications).
• Financial Intelligence Unit (FIU) Germany, typologies and indicators of VAT fraud/VAT carousels (typology paper, 2023).
• Müller/Fischer, Tax Compliance, 2nd ed. 2022, Annex 1, pp. 533–535 (catalogue of objective suspicion indicators, Federal Ministry of Finance guidance).

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