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SPANISH tax authorities were defrauded of almost €69 million in IVA which was not paid on alcoholic drinks purchased by a network of firms and front men.
Eight people arrested by the Guardia Civil and Tax Agency for buying 8.2 million litres spirits between 2018 and 2020 and avoiding tax payments.
The organisation that was dismantled had 93 low-tax companies in Spain and Germany.
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Authorities claimed that the money obtained from the swindle had been laundered by the British dependency. They also said the group had used various shell companies – many of which were formed months before they disappeared and seemed to have a legal air about them.
19 searches homes and business premises were searched in Barcelona, Cadiz, A Coruña, Madrid and Valencia, as well a room of a luxury hotel in Ibiza where one of the three alleged ringleaders was staying.
Many of the detainees were familiar with similar searches.
The long list of seized items included a yacht, five high-end vehicles (including three Porsches), 34 luxury watches and €333,085 in cash.
Bank accounts with a balance of more than €700,000 have been blocked and an order has been issued to seize 21 properties.
The arrestees were accused of crimes against public treasury, money laundering and document forgery, as well as membership in a criminal organization.
Tax inspectors discovered in 2023 that there was a possibility of a massive tax fraud being conducted via a tax storage facility for alcoholic beverages in the province of Valencia.
Then, they filed a complaint at the European Public Prosecutor’s Office.
The investigation revealed that the suspects had imported large quantities of alcohol to Valencia from other EU member states.
The Netherlands and Portugal also offered similar services to help them in their operations, where they could avoid paying IVA. They did this by taking advantage the transitional taxation regime that applies to intracommunity transactions.
The bottles were sold without IVA to wholesalers and the profits were then laundered through shell companies and fake invoices.
The money was transferred from one bank account to another, making it difficult to track.
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