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Czechia: Seven suspects and three companies charged with VAT fraud worth over €50 million

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(Luxembourg, 3 November 2023) – Last week (26 October), the European Public Prosecutor’s Office (EPPO) in Prague (Czechia), in cooperation with the Czech Police’s National Organized Crime Agency, brought charges against seven individuals and three companies for evading taxes and for participating in an organised crime group. This followed an action day, on which several searches and seizures were carried out, and three of the individuals were arrested.

According to the investigation, the suspects – operating as members of an organised crime group – arranged the importation of goods from China, with the aim of evading VAT. It is understood that they falsely applied a VAT deduction by untruthfully declaring that the goods would be exported to companies registered in other EU Member States, which would have exempted the suspects from paying VAT. In reality, however, the goods were secretly shipped by delivery company to warehouses elsewhere in the EU. These goods were then sold via an online marketplace, without payment of VAT.

Based on the evidence, in these activities the members of the suspected organised crime group caused damage of €50 395 618 (CZK 1 209 494 870).

During the action day, which was carried out by the EPPO on 25 October, three persons were arrested, more than 500 pallets of goods, three cars, three luxury watches and over €100 000 (CZK 2.5 million) in cash were seized. In addition, almost €700 000 (CZK 17 million) was frozen from bank accounts.

If convicted, the defendants face up to 13 years of imprisonment.

The EPPO is the independent public prosecution office of the European Union. Itis responsible for investigating, prosecuting and bringing to judgment crimes against the financial interests of the EU.