VAT fraud involving luxury cars: ten million euro loss in Austria
Five people were arrested in Austria and twelve house searches were conducted in a Europe-wide raid. Total damage exceeds 100 million euro.
Five arrests in major raid against luxury car carousel fraud
European investigative authorities carried out a coordinated major operation on Wednesday to dismantle an alleged network for VAT fraud in the international luxury vehicle trade. According to Kleine Zeitung, the estimated total damage amounts to more than 100 million euro – of which over ten million euro falls on Austria.
In Austria, twelve house searches were conducted, with a focus on Tyrol and Vorarlberg. Five people were arrested: three directly in Austria, and two further Austrian nationals by German enforcement agencies in Germany. The arrests were made at the request of the public prosecutor's office.
In total, 84 employees from the Austrian financial administration were deployed, supported by police forces and national and international partner authorities. The tax investigation division of the Office for Fraud Prevention (ABB) was instrumental in the domestic investigations.
The operation is named J.A.V.E.L.I.N. – Joint Analysis of VAT Evasion in Luxury International-vehicle-trading Networks – and was carried out on the orders of the European Public Prosecutor's Office (EPPO). More than 100 operational locations were processed across Europe. The investigations extended across numerous EU member states and encompassed several interconnected investigation strands.
The suspicion centres on so-called carousel fraud: criminals exploit gaps in the tax system of the EU internal market by shifting – mostly high-value – goods between traders from different EU countries in a circular manner. The companies involved claim VAT reimbursement which in many cases they have not actually paid.
In the Austrian investigation strand, vehicle deliveries with a total volume of approximately 80 million euro were the focus. According to the current state of investigations, vehicles are said to have been traded through a network of companies and intermediary entities in order to obscure actual delivery routes. According to the Finance Ministry, so-called missing trader companies, letterbox companies, as well as fraudulent transport and delivery certificates were used in the process.
In addition to business records and electronic data carriers, high-value assets and properties were also secured. The evaluation of evidence is ongoing and is being carried out in close coordination with the EPPO.
For tax authorities in EU countries, carousel fraud remains difficult to trace, according to the Finance Ministry. The EU assumes that tax losses from this form of fraud amount to at least 50 billion euro per year across the union.
Source: Kleine Zeitung