Four people were arrested in Belgium on Tuesday 28 March. They are suspected of using letterbox companies based in France in particular to evade VAT on products imported from China.
By Le Figaro with AFP
Published on 03/28/2023 at 10:38 p.m
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According to the European Public Prosecutor’s Office, the fraud is estimated at 6.6 million euros in customs duties. Richard Villalon / stock.adobe.com
The European Public Prosecutor’s Office announced on Tuesday March 28 that they had uncovered a VAT fraud scheme on goods imported from China in Belgium, which is suspected to have facilitated more than 300 million euros in tax evasion.
Four people were arrested and ten searches were carried out in different places in Belgium, notably in Zeebrugge (north) and Liège Airport (east), one of the most important platforms in Europe for e-commerce with China. “It is estimated that the investigated activities caused damage of at least 303 million euros in evaded VAT and 6.6 million euros in customs duties between 2019 and 2022,” says a press release from the European Public Prosecutor’s Office (EPPO). to the English acronym).
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Fraud via bogus companies
The money would have been funneled at the expense of the European taxpayer via the customs procedure known as ‘CP42’, which provides that an importer is exempt from VAT in the EU country through which the goods are being transported before exporting to another member state on sale is.
However, according to the European Public Prosecutor’s Office, false final destinations were declared thanks to the use of letterbox companies in France, Germany, Hungary, Italy, Poland and Spain. Thus, the VAT on these goods – electronic devices, toys and amount of accessories – was withheld by the seller. “The goods were eventually sold to the final consumer, who paid the full price of the products including VAT,” the statement said. However, the investigation revealed that this tax paid by the end consumer “was never declared by the alleged criminal organization or paid to any tax administration”.
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According to the Belgian newspaper L’Echo, the company at the center of the investigation is the logistics company Easylog Solutions, which served as a relay in Belgium for a fraudulent system developed by the Chinese. This is one of the largest files ever from the Belgian section of the European Public Prosecutor’s Office.
This jurisdiction, in which 22 EU countries participate, was created in June 2021 with the task of investigating and prosecuting crimes that could damage the Union’s financial interests, including cross-border VAT fraud and cross-border crime.