Fraud of over 48 million euros, discovered by the European Public Prosecutor's Office. Searches and arrests in several European states, including Romania

Seven people were arrested in Germany, Spain and the Netherlands, while prosecutors carried out in 10 European states, including Romania, in an investigation by the European Public Prosecutor's Office regarding suspicions of VAT fraud of a network that sells electronic provisions, the institution led by Laura Codruța Kovesi, quoted by Agerpres, said.

The European Public Prosecutor's Office suspects that the group used a system in which shell companies based in several EU countries and the United Kingdom fraudulently applied a reduced rate of VAT to the sale of electronic devices to the end consumer and between companies to illegally increase their profits.

“This means that the reseller must pay VAT only on the profit margin that he obtains (the difference between the price paid for the item and the price at which it is sold) and not on the full selling price of the item,” explains the prosecutor's office.

This tax regime should only apply to resold goods for which VAT has already been paid, while in this case 'new products are considered to have been sold exclusively on paper and only from a tax point of view, as if they were resold goods'.

“As a result, the goods could be sold at a lower market price, leading to unfair competition and a loss of €48 million in VAT,” the EPPO explained.

During the investigation, more than 300 police officers and tax inspectors seized a large number of documents, electronic devices and evidence, as well as cash, mobile phones, jewellery, cars, watches and gold worth €4 million. In Romania, the action was carried out by the Directorate for Combating Organized Crime.