VAT scammers arrested in Hungary: Europol

VAT fraud from reselling mobile phones caused €29.8 million in tax losses

Europol

VAT scammers arrested in Hungary: Europol. Source: pexels.com

An organized criminal group in Hungary has been dismantled, according to Europol. The group that masterminded cross-border VAT and carousel fraud was dismantled by the Hungarian National Tax and Customs Administration in support of Europol.

This comes after the authorities cracked down on a large criminal group in 2019 that had caused a €12 million deficit in the Hungarian budget. This time, a more complex criminal activity was unveiled.

Missing business persons who dealt in the import of mobile phones failed to remit VAT to the national treasury despite submitting their VAT returns. The phones were sold at a loss to buffer companies and ended up in the hands of broker entities. The brokers then sold the mobile phones at higher prices on online marketplaces.

They were also involved in intra-community business deals with companies in EU member states. The traders then reclaimed the VAT despite not being paid by the dodgy traders. These buffer entities neither engaged in any economic activities or even hired workers but were used for pretentious invoicing.

The criminal gang attained significant gains. However, they caused around € 29.8 million in state budget tax losses.

Since the onset of the investigation, Europol has provided analytical support and facilitated data exchange. The entity even had three experts in Hungary to aid with real-time analysis of data against Europol’s databases.

The illegal trade by the missing traders affects both the government and the citizens. Citizens were robbed of millions of euros not forgetting that the scheme negatively affected public services.

We’ve reported that over 70% of Indians are concerned about fraud amid COVID-19.

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