Online store shut down ahead of Black Friday in fraud investigation

Warehouse filled with products from China
Warehouse filled with products from ChinaFIODFIOD

On Wednesday a online store was shut down and three homes in Arnhem and one in Hengelo were raided as part of an investigation into sales tax fraud and forgery of documents when importing goods from China, FIOD, the Tax Authority's investigative department, said in a statement on Friday. 

According to FIOD, multiple suspects made improper use of the so-called "reverse charge mechanism" when importing goods from China. With this mechanism, VAT is not paid on the import of goods, but on the monthly or quarterly declaration. The suspects only reported part of he VAT on their return. They are also suspected of pretending to export goods again, so that no VAT have to be paid in the Netherlands. In this way they committed at least 2.5 million euros in VAT fraud over 2018 and 2019, FIOD said.

This case came to light when Customs noticed import declarations with too low customs values. The suspects tried to circumvent VAT and import duties, so that they can offer products for cheaper than companies that do pay their taxes. "This is a distortion of competition", FIOD said.

The website on which these goods could be ordered was shut down on Wednesday, which means the suspects can't benefit from Black Friday today - one of the biggest shopping days in the year. FIOD and the Public Prosecution Service also seized digital administration, bank accounts, real estate, cars and two forklift trucks. 

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