Ireland has signed up to the new directive, but the UK and Denmark have not. The directive will also be a major part of the law to be applied by a future European public prosecutor's office (EPPO) which is to be created by a number of member states through enhanced cooperation.

The directive provides common definitions of a number of offences against the EU budget. They include cases of fraud and other related crimes such as active and passive corruption, the misappropriation of funds and money laundering, amongst others.

Serious cases of cross border VAT fraud will also be included in the scope of the directive when above a threshold of €10m (£8.4m) and involve two or more EU member states.

The directive will cover the use or presentation of false, incorrect or incomplete VAT-related statements or documents that result in a reduction in EU budgetary resources, and the non-disclosure of VAT-related information in violation of a specific obligation, with same effect. It will also cover the presentation of correct VAT-related statements for the purposes of fraudulently disguising the non-payment or wrongful creation of rights to VAT refunds.

It includes minimum rules on prescription periods, within which the case must be investigated and prosecuted, as well as rules on sanctions, including imprisonment for the most serious cases.

Owen Bonnici, minister for justice of Malta said: ‘The protection of the EU budget is key to ensuring the most efficient and effective use of European taxpayers' money. Having common definitions, common rules, and common minimum sanctions is a step forward for fighting fraud across the EU.’

Once voted by the Parliament, the directive will be published and member states have 24 months to implement the provisions at national level.

The EU directive on the fight against fraud to the Union's financial interests by means of criminal law is here.