- A European Public Prosecutor’s Office (EPPO) investigation in Cologne, Germany, resulted in six searches and the seizure of 40 luxury cars worth approximately 1.2 million euros, real estate, and 40,000 euros in cash.
- One person was arrested.
- The investigation, codenamed “Dutch Windmill,” began in September 2024, based on findings from an ongoing investigation into used car sales by the EPPO office in Rotterdam, Netherlands.
- The total turnover behind the scheme is estimated at over 30 million euros, and the estimated VAT damage amounts to at least 5.8 million euros.
- The investigation revealed that the CEO of a German car dealership sold used cars to Dutch car dealers who allegedly manipulated VAT rules to reduce the tax owed on vehicle sales.
- Instead of declaring that the German cars belonged to a car dealer, the Dutch car dealers falsely claimed that the cars had previously been owned and resold by individuals.
- According to VAT regulations, when an individual sells a vehicle, VAT on the full price of the vehicle no longer applies, as the individual would have paid it when they first purchased the car (the so-called margin tax system).
- After that, only the dealer’s profit margin is taxed, and this is believed to have allowed the suspects to avoid a significant amount of VAT in the Netherlands and also have a higher profit margin for the sellers, as they acquired the vehicles at a lower cost and paid less tax, thus creating unfair competition.
- The German car dealer was aware of the misleading description of the vehicles’ transaction history and that the cars were actually transactions between dealers.
- As a result, his intra-Community deliveries, which were initially exempt from VAT, should be subject to German VAT retroactively.
- The investigation was supported by the German tax investigation offices in Dusseldorf and Munster and the Criminal Police Department in Munster.
- All those involved are presumed innocent until proven guilty in the competent German courts.
- The European Public Prosecutor’s Office is the independent prosecutor of the European Union.
- It is responsible for investigating, prosecuting, and adjudicating crimes against the financial interests of the EU.
Source: taxheaven.gr
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
