Joint operation of the Tax Agency and the National Police

• 22 people have been arrested and 9 searches have been carried out at the homes of the main suspects and at several corporate headquarters in Spain.
• They simulated a series of perfectly coordinated operations for the purchase and sale of new tires between companies, to stop paying the VAT dues and obtain improper tax refunds through the use of 'carousel fraud'.
• This fraud allowed the price of goods to be lowered below the market price, concentrating the business of selling tyres to distributors, making it more difficult to compete with the prices generated.
• Crimes against the public treasury, money laundering, document falsification and membership in a criminal organization that would have been committed between 2017 and 2020 are being investigated.

June 15, 2022.- Officials of the Tax Agency, in a joint operation with agents of the National Police, have dismantled three criminal organizations that acted in a coordinated manner in the national territory, whose The main objective was to defraud the public treasury through the creation of a transnational corporate network that simulated a series of operations for the sale and purchase of new tires between perfectly coordinated companies to stop paying the due amounts of Value Added Tax (VAT) and obtain improper returns from the AEAT through the use of 'carousel fraud'. A total of nine searches have been carried out at the homes of the main suspects and at various corporate headquarters in Spain.

The operation began in 2018, when the Valencia Regional Inspection Unit, in coordination with the National Fraud Investigation Office (ONIF) of the Tax Agency, together with the Economic and Fiscal Crime Unit of the National Police (UDEF), detected the existence of a international business network whose objective was to defraud the public treasury on a large scale, through the creation of a transnational corporate network that simulated a series of tire purchase and sale operations between perfectly coordinated companies to stop paying the VAT dues and obtain improper tax refunds through the use of 'carousel fraud'. In this fraud there were people involved in several countries of the European Union, such as Italy, France and Portugal, in which they acted in a coordinated manner to achieve the aforementioned fiction, thus evading the payment of taxes (VAT) generated by their activity.

VAT fraud in intra-community operations

At the beginning of this fraud chain were nine Portuguese companies that, making use of the transitional tax regime in the Value Added Tax (VAT) for intra-community operations, simulated selling the marketed items, in this case tires, to companies located in Spain.

Once the articles were introduced into national territory, they were subject to a series of releases that allowed them to be made available to a group of merchants who, after successive sales in Spain, stopped paying VAT payments. passed on (21%). This allowed the price of goods to be reduced below the market price, monopolising the tyre sales business for distributors, since no legal supplier can compete with the prices generated by deducting the percentage of fraud.

In turn, the aforementioned organizations carried out the criminal activity called 'VAT carousel', which consists of carrying out fictitious exports using final distribution companies, related to the organization, which request the refund of input VAT on sales made to companies linked to the organization in the intra-community sphere. The merchandise was then reintroduced into Spain through sales made to the corporate network located in our country, thus beginning the fraudulent activity once again.

In this way, on the one hand, organizations enrich themselves directly through the receipt of improper VAT refunds requested from the Public Treasury, generating huge benefits for their coffers that they use. And on the other hand, to acquire merchandise that they subsequently put into circulation in the tire commercial segment with discounts generated by the absence of payment of the VAT dues that monopolize the market in their favor, damaging the free competition that should govern the market and eroding the economic fabric generated by legal companies in the sector.

Products at an unbeatable price

This operation, in addition to achieving large profit margins through defrauded quotas, allowed them to put the product on sale at an unbeatable price, cornering the market for these products at a national level.

In this way, a fraud against the Public Treasury has been generated, which has been calculated by the Tax Agency at an estimated amount of more than 23.5 million euros, carried out by each of the Organisations identified in the set of fiscal years 2017, 2018, 2019 and 2020.

During the searches, numerous computers and a large amount of documentation of interest to the investigation were seized, both in paper and electronic format, as well as cash.

The operation, carried out in our country by the Central Court of Instruction number 3, National Court, was carried out by agents of the Tax Fraud Section of the Economic and Tax Crime Unit of the National Police (UDEF) as well as by officials from the Regional Inspection Unit of Valencia, Andalusia, Castilla La Mancha, Extremadura and the ONIF of the AEAT.