site.btaUPDATED Tax Fraud Ring Busted by Police

An organized crime ring suspected of financial and tax fraud has been busted by the police in cooperation with the National Revenue Agency and the prosecuting magistracy, Deputy Prosecutor General Maria Pavlova said at a news conference on Monday. The damage caused by this criminal activity in just one year is worth some BGN 6 million.

The news conference was also attended by the leadership of the Sofia City Prosecution Office, Interior Ministry Secretary General Zhivko Kotsev, National Revenue Agency Executive Director Rumen Spetsov.

Kotsev explained that dozens of sites across six cities and towns – Sofia, Varna, Plovdiv, Burgas, Kostinbrod and Troyan, were searched. Some of them are offices of accounting firms. Notebooks and computers were seized, and a total of 28 people were interrogated, he added.

The NRA explained that several companies were involved in the fraud scheme. Their aim was to avoid paying VAT by concluding fictitious transactions for goods and services. 

Serafimov said that the companies managed to evade VAT when importing luxury cars. It is alleged that VAT on a turnover of some 30 million leva was not paid through shell companies.

The cars were acquired from companies in the EU. They were declared as property of the shell companies, thus evading VAT. When the cars entered Bulgaria, they had to reach the end user. In those transactions, each customer had to pay 20% of the amount to the importer, who in turn transferred the money to another company that was also part of the chain. Thus, the fees due were not paid to the State.

According to the prosecuting magistracy, the investigation of the case will be complicated as a lot of evidence and a number of expert reports have to be collected.