European Prosecutors Uncover €48 Million Shell Company Network Linked to VAT Fraud in Luxembourg

The European Public Prosecutor’s Office (EPPO), headquartered in Luxembourg, has uncovered a large-scale VAT fraud scheme involving a network of shell companies operating across multiple European countries. The coordinated investigation led to the arrest of seven suspects in Germany, Spain, and the Netherlands, with authorities estimating the total tax loss at €48 million.

The case centers on the trade of electronic goods, where suspects allegedly abused a reduced VAT regime by falsely declaring new electronic devices as second-hand, allowing them to benefit from tax advantages reserved for pre-taxed goods. According to EPPO, this manipulation not only caused significant tax losses but also distorted fair market competition across the European Union.

As part of the investigation, more than 100 searches were carried out across Czechia, Germany, Hungary, Ireland, Italy, the Netherlands, Romania, Spain, and the United Kingdom. In total, over 300 tax inspectors and police officers participated in the operation, seizing cash, documents, electronic devices, mobile phones, luxury cars, jewellery, watches, and gold valued at around €4 million.

Investigators also seized assets and evidence in Luxembourg, Belgium, Austria, Lithuania, and other EU states, underlining the cross-border nature of the fraudulent network. The EPPO revealed that since 2018, the suspects have been using shell companies registered in multiple jurisdictions to conceal profits and evade taxes.

The extensive international cooperation highlights the growing efficiency of European anti-fraud operations, with EPPO emphasizing its commitment to tackling VAT fraud schemes that exploit loopholes in the EU’s internal market.
Read More : Fraude à la TVA: le Parquet européen démantèle un réseau de sociétés-écrans - L'essentiel  

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