As part of a criminal investigation, the Netherlands’ Fiscal Information and Investigation Service (FIOD) recently searched 8 properties in Eindhoven, Capelle a/d IJssel, Rotterdam, Schiedam, Vlaardingen and Zwijndrecht. The authority suspects four men of VAT carousel fraud involving 9 million euros ($10.89m). While the FIOD has seized physical and digital properties and bank accounts, it has not yet arrested any suspect.
The FIOD began its investigation after receiving information from the Tax and Customs Administration. The information involved a Dutch electronics company that trades with companies in the Netherlands and elsewhere within the EU. The FIOD suspects that the company conducts fraudulent trade of SD cards to reduce the sales tax payable from legal trade.
The FIOD believes that a chain of fraudulent companies has been established over various EU countries. These companies circulate goods and money by committing VAT fraud. Such companies, called Ploffers, receive VAT from customers but willfully do not deposit it. Meanwhile, other Dutch companies in this fraud chain deduct the unpaid VAT from the price of their goods. This allows them to sell their products at a cheaper rate.
Source: Fiscal Information and Investigation Service, Netherlands