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Poland busts largest ever VAT fraud operation

World

Polish tax authorities have disclosed that a recently busted VAT fraud gang is believed to be the biggest in the country's history, daily Rzeczpospolitareported, cited by news portal Notesfrompoland.com.

The illegal operation ran for eight years, selling fictitious invoices for an estimated total value exceeding one billion zloty (EUR 223 million), according to an investigation by the Regional Prosecutor's Office in Warsaw and the National Tax Administration (KAS).

The company, founded in 2013, sold the fake invoices to other firms to inflate their costs and thus pay lower tax on earnings. The fictitious services would be matched to the line of the business of the companies – which included transport, construction and IT – to avoid raising suspicion.

The fake invoices would be issued by shell companies, whose management boards included unemployed and homeless people. Customers would usually pay between 8% and 10% of the sum on the invoice, reported Rzeczpospolita.

In total, 35 people have been charged with participating in an organized crime group and seven are suspected of VAT crime. Four of them, including the two who led the operation, are in detention. However, officials believe that as many as 1,500 people could have been involved in the case, either as customers or by running the group.

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