Every year, organized criminals use VAT schemes to syphon an amount equivalent to the GDP of Greece from the bloc’s budget. By far the most damaging and sophisticated of these scams is ‘carousel fraud,’ which drains an estimated 50 billion euros per annum from the EU’s coffers.
The key suspects in this case are believed to have used companies in the Czech Republic, Romania and Slovakia to take advantage of the EU’s rule for authorities not to demand VAT to be paid for trade between member countries.
Carousel fraud involves the dissolution of companies in the course of cross-border sales in order to claim falsified rebates from respective tax authorities in different countries.
Some of the companies involved in the carousel, or the so-called missing traders, “did not fulfil their tax obligations, and therefore permitted another of these companies, based in Germany – the so-called broker – to claim an undue VAT credit,” the statement said.
The heart of the criminal activity was in Hamburg, Germany, while money laundering was reportedly organized in the Czech Republic and Slovakia, with substantial linkages in Romania.
EPPO further stated that bank accounts and assets linked to the suspects have been blocked in Slovakia and the Czech Republic.
