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Criminal activitiesLuxembourg implicated in the “biggest European VAT fraud”
LUXEMBOURG/WORLD – Searches took place on Tuesday in several countries, in an investigation into VAT fraud on the sale of electronic devices. It all started with a suspicious company in Portugal.
Searches took place on Tuesday in 14 EU countries in an investigation into cross-border VAT fraud on the sale of electronic devices, for an estimated loss of 2.2 billion euros, the prosecution announced. European in charge of investigations. More than 600 individuals are believed to be involved in what European Public Prosecutor’s Office (EPPO) Laura Kövesi called the “biggest European VAT fraud uncovered so far” in terms of scale.
The 27 EU countries except Denmark are affected by these “criminal activities”. The investigation, launched eighteen months ago, also has ramifications outside the EU, in Albania, China, Mauritius, Serbia, Singapore, Switzerland, Turkey, United Arab Emirates, United Kingdom and United States. This operation, dubbed “Admiral”, started from investigations carried out in April 2021 by the Portuguese tax authorities in Coimbra (center) on a company selling mobile phones, tablets, headphones and other electronic devices, suspected of VAT fraud.
A suspicious company in Portugal
The case was reported to the European Public Prosecutor’s Office when it took office in Luxembourg in June 2021. Investigators, supported by Europol, gradually established links between the suspect company in Portugal and nearly 9,000 other entities in different countries. This chain included companies acting as suppliers of electronic equipment and others who sold these devices online while claiming VAT refunds from national authorities, before funneling these revenues offshore and disappearing.
The so-called “carousel” VAT fraud costs the European Union almost 50 billion euros a year according to Europol estimates. It involves several companies established in at least two EU Member States. It consists of obtaining the deduction or reimbursement of the VAT relating to an intra-Community supply of goods when this VAT has not been repaid to the tax administration concerned.
The searches were carried out in Belgium, Cyprus, France, Germany, Greece, Hungary, Italy, Lithuania, Luxembourg, the Netherlands, Portugal, Romania, Slovakia and Spain. Previous search operations had been carried out on October 12 and 13 in the Czech Republic, Hungary, Italy, the Netherlands, Slovakia and Sweden.
“A clear demonstration of the advantages of a transnational prosecutor’s office”
This operation is “a clear demonstration of the advantages of a transnational prosecutor’s office”, underlined Ms Kövesi. The EPPO, which brings together 22 of the 27 EU Member States, is competent for fraud affecting the Union’s budget.
In 2008-2009, a gigantic VAT scam on the CO2 market cost the French tax authorities 1.6 billion euros, according to the Court of Auditors and around 5 billion euros at European level, according to Europol.
(AFP)