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Lithuania Hits Revolut With Record €3.5M Fine For Compliance Failures

by THEFUTURE.TEAM
April 9, 2025

Revolut, the UK’s most valuable fintech startup, has been slapped with a €3.5 million ($3.83 million) fine by Lithuania’s central bank over anti-money laundering (AML) compliance failures. The penalty, announced Monday, is the largest ever imposed by Lithuania’s financial regulator, underscoring growing scrutiny of the fast-growing neobank.

Regulatory Red Flags

The fine follows a routine inspection that uncovered serious lapses in Revolut’s AML protocols, including failures in monitoring business transactions and identifying suspicious activities. According to the central bank, these deficiencies left Revolut unable to flag potentially illicit transactions properly.

While the regulator did not specify whether actual money laundering had occurred, Revolut was penalized for procedural gaps rather than confirmed illicit activity. In response, the company emphasized that the investigation did not find any direct money-laundering violations but rather areas where its internal controls needed strengthening.

Revolut’s Response

A Revolut spokesperson stated that the firm immediately addressed the identified weaknesses and worked closely with Lithuanian regulators to reinforce its compliance framework.

“Revolut Bank is committed to the highest standards of regulatory compliance and took swift action to remediate procedural shortcomings,” the spokesperson said.

Revolut has since signed a settlement agreement with the Lithuanian central bank and implemented corrective measures to align with regulatory expectations.

A High-Stakes Fine For A High-Value Fintech

This regulatory setback comes as Revolut continues its meteoric rise in the fintech world. Valued at $45 billion following a recent secondary share sale, the London-based company has outpaced several of Europe’s biggest banks in market worth.

Despite the fine, Revolut remains financially robust, having reported a record-breaking £438 million ($559.5 million) pretax profit in 2023. However, the regulatory hit underscores the increasing pressure on fintech firms to tighten compliance as they scale globally.

With EU regulators keeping a close watch on digital banking disruptors, Revolut’s fine serves as a stark reminder: growth cannot come at the expense of regulatory vigilance.

EU E-Commerce VAT Systems Generate €257.9 Million Revenue for Cyprus in 2024

by THEFUTURE.TEAM
August 11, 2025

Robust Revenue Growth Through Streamlined VAT Collection

Cyprus has demonstrated a significant fiscal boost in 2024 with €257.9 million generated from the European Union’s e-commerce VAT systems, according to Tax Commissioner Sotiris Markides. This impressive performance underscores the effectiveness of the One Stop Shop (OSS) and Import One Stop Shop (IOSS) frameworks in simplifying cross-border tax compliance.

Simplified Procedures for EU and Non-EU Businesses

The OSS system allows Cyprus-registered businesses to streamline VAT declaration and payment on sales to consumers in other EU countries. Companies simply register on the local OSS platform, apply the consumer’s VAT rate, aggregate their submissions quarterly or monthly, and remit a single consolidated payment. Subsequently, Cyprus allocates the appropriate share to each respective EU country. This efficient process extends to non-EU sellers as well, who can have their intra-EU distance sales managed under the Union Scheme.

Breakdown of VAT Revenue Streams

Last year’s declarations under the various schemes illustrate the system’s broad reach: €217.9 million was collected via the Union Scheme, €36.9 million through the Non-Union Scheme, and €3.1 million via the Import Scheme. While the Union Scheme caters to both EU and non-EU sellers engaging in distance sales, the Non-Union Scheme specifically accommodates non-EU firms delivering services to EU consumers. Furthermore, the Import Scheme targets goods valued at less than €150 that are imported from outside the EU.

Implications and Broader Impact

Implemented in July 2021 as an evolution from the more limited MOSS system, these reforms have not only consolidated tax collection through an expansive OSS but also integrated the IOSS for low-value imports. By designating certain online marketplaces as “deemed suppliers,” the new framework ensures that VAT collection is both efficient and equitable. Across the EU, these mechanisms have generated over €33 billion in VAT revenues in 2024, reflecting a successful effort to simplify tax compliance, reduce administrative burdens, and promote fair taxation across the bloc.

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