More than 2000 tax, customs and police officers have carried out raids over seven countries to crack down on car sales VAT fraud.
Five people were arrested after 450 searches at properties and homes in Belgium, Germany, Hungary, Italy, the Netherlands, Portugal, and Spain.
Europol supported the operation – code-named Huracán – after the discovery of a value-added tax (VAT) fraud scheme concerning the international trade of more than 10,000 cars.
The fraudulent turnover of the organized crime group behind the scheme is estimated at EUR 225 million.
Operation Huracán started with a report from a tax authority in Italy in January 2021. The authority had received an alert when companies registered in Italy and Hungary, following their acquisition of a high number of cars from Germany and subsequent sale to private persons and companies in other EU countries, had not paid VAT to the Italian state.
What began as a small report quickly turned into the discovery of a large-scale international VAT fraud scheme.
Europol said:
“The organized crime group used a vast network to deploy a modus operandi as follows.
“A Germany-based buffer company, considered a legitimate company on paper, bought cars online from a German car dealer.
“The company paid the price including VAT, introduced a VAT claim and received back the VAT from the German state.
“Afterwards, the company sold the cars to missing traders outside Germany, namely Italy and Hungary.
“The price of the car was then marked slightly above the net price indicated on the original/initial invoice from the online marketplace, but already more attractive, as the so-called “missing traders” did not have to pay VAT due to intra-community VAT rules.
“The missing trader then sold the car at a very appealing price to a final customer or another company.
“The final customer paid the VAT, and instead of paying the VAT to the state, the missing trader – as the name implies – kept it as profit and disappeared. “