- 84 properties and 240 bank accounts belonging to the alleged perpetrators have been seized, under the new powers extended to the Agency under the anti-fraud law

- The companies defrauded 64 million euros in VAT and Corporation Tax using a complex network that was hid the real value of imports and sales in sales not through the books

- The 43 allegedly involved, most of Chinese origin, include a customs representative

After more than a year of investigations, the Tax Agency has recently ended a macro-operation in Catalonia against the black market economy linked to imports of Asian goods. Last December, the Agency filed a total of 18 complaints before the Public Prosecutor of Economic Crimes of Catalonia for the possible commission of 133 crimes against the Public Treasury by 23 companies dedicated to the wholesale trade of clothing items, for gifts and others that, for the most part, imported from China.

These companies, located in the province of Barcelona, defrauded more than 64 million euros in VAT and Corporation Tax between 2007 and 2011 through a network aimed at hiding the real value of imports and the subsequent sale of the merchandise in sales not through the books.

Thus they culminate the activities inspectors that the Tax Agency initiated on these companies in October 2011, in an operation that had the share of 102 comprehensive civil servants in the Regional Dependences of Inspection and Aduanas and Excise Duties of the Special Delegation of the SPANISH TAX AGENCY in Catalonia, with the Vigilance agents support Custom officer of the Delegation Special.

As part of this operation, and with the authorisation of the Administrative Courts of Barcelona, they proceeded to enter and search 20 premises from which these companies operated in Barcelona, Sant Adria del Besós and Badalona. As a result of these searches, a wide variety of documentation and copies of computer files containing information on the actual volume of operations undertaken by these companies was apprehended, which proved to be much higher than they had been declaring.

Modus operandi

The fraud began with the import of products from Asia, with volumes and prices that were much lower than the actual values declared to Customs. Therefore, on the one hand, the fraud involved circumventing significant import tariffs and, on the other hand, concealing a high percentage of purchases allowing them to undertake illegal domestic sales to customers (retailers), without incurring in any inconsistencies that would have raised the suspicion of the tax authorities. According to investigations undertaken, approximately 70% of wholesaler sales were channelled through sales not through the books.

In total, 43 people were involved, most of whom were Chinese nationals. In terms of the companies involved, a customs representative is believed to have been involved who is believed to have conceived a thorough system for forging invoices to justify the acquisition of the imported goods with a view to demonstrating the false decrease in the declared value before the Spanish Customs authorities.

This complex forgery system allowed the original invoices of the Asian supplier to be replaced with others, issued by shell companies, set up in China, containing a product value that was much lower than the real value.

In addition to the more than 64 million euros of tax allegedly defrauded by these companies, both in VAT and Corporation Tax, the scheme also circumvented customs duties and other additional fees that, as they do not exceed the 120,000 euros established in the Criminal Code as the minimum threshold to be considered as an offence, must be settled at a later date via administrative channels.

Precautionary measures

The actions undertaken by the Tax Agency against this group of alleged tax evaders was completed in the recent days with a major deployment that sought to ensure the collection of tax debts.

Thus, and making use of the new powers attributed to the Tax Agency in the recent Law 7/2012, of 29 October, amending the tax and budgetary regulations and adapting the financial regulations for the intensification of activities in the prevention and fight against fraud, the Tax Agency, having formalised the charges, has preventively apprehended 84 properties and 240 bank accounts, and sealed four safes at banking institutions on behalf of persons who, at the instructions of the Tax Agency, are listed as those responsible in the complaints.

This operation, performed by the Tax Agency in Catalonia, is part of the Tax Agency's annual fraud control plan, one of the priorities of which is the integral control of the import and sale of goods coming from Asia to break up possible back market economy networks.