ANAF Antifraud Division identifies new imported clothing VAT fraud scheme


In brief

The ANAF Antifraud Division has discovered a fraudulent scheme relating to clothing and footwear imported from Turkey, carried out with the purpose of avoiding paying taxes to the state budget by lowering the customs value of the imported goods.


In detail

The ANAF Antifraud Division has identified a Romanian entity that imported clothing and footwear from Turkey, as part of a transactional chain, with the purpose of avoiding paying taxes owed to the state budget. The unpaid VAT and corporate income tax amounts to RON 9.24 million (approximately EUR 2 million). The goods were declared in customs with an insignificant value, to decrease the amount of VAT owed to the state budget. The goods were then sold mostly without issuing any legal documents and without reporting the real income, thereby avoiding the payment of taxes to the state budget.

According to the legislation in force as of 1 January 2018, the Romanian tax authorities are allowed to deny the VAT deduction right of taxpayers only if, after checking all available evidence, they can prove beyond any doubt that the taxable person knew or should have known that a transaction involved VAT fraud upstream or downstream in the supply chain.

In this context, PwC recently launched at CEE level two unique VAT fraud detection tools. The two solutions, the VAT Fraud Tracker and FAIT, allow the monitoring of current and historical data in order to keep track of intra-Community trade with goods and to identify suppliers / customers susceptible to being involved in fraud.


The takeaway

In order to avoid being denied their VAT deduction right, a legislative clarification encourages taxpayers to be proactive and monitor whether their suppliers / customers are involved in fraudulent chains. Our new tools, VAT Fraud Tracker and FAIT, can be the first steps. To test the demo version for free, you can arrange a meeting with the PwC team right now!



Contact us

Daniel Anghel

Daniel Anghel

Partner, Tax and Legal Services Leader, Romania

Ana Sebov

Ana Sebov

Forensics Leader, Romania

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