Carousel fraud is one of the several types of VAT fraud and while those instances utilising three or four companies may prove relatively easy to track, carousel fraud cases can involve dozens or even hundreds of companies.
EU VAT laws mean that goods can be sold and passed between EU member states without the supplier having to charge VAT. The intention is that goods can pass freely and readily without the supplier having to determine the appropriate rate, and subsequently pay the appropriate department in the receiving country.
With respect to a Carousel fraud, a company purchases goods from abroad without having to pay VAT. They then sell these goods to another company while charging the VAT. The receiving company then sells the goods to yet another company, once again charging VAT. After this process has continued for some time, and the final company in the carousel collects the VAT, all of the companies can disappear without having to pay any VAT on the sales or the original purchase.
VAT fraud is taken seriously and those that are found guilty of this financial crime will be expected to repay the money they obtained as well as any profits that the money made. Freeman & Co Solicitors are a specialist criminal defence firm who are experts in dealing with this particular type of complex crime.
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