Polish fiscal authorities bust VAT fraud
Polish fiscal authorities have increased the effectiveness of combating VAT fraud thanks by focusing their attention on companies registered in virtual offices, the Polish media reported in March 2014.
“We tried to capture common elements of the fraudulent mechanisms and it led us to the conclusion that fraudsters are exceptionally eager to use virtual offices, which are very useful in making a quick disappearance,” Agnieszka Krolikowska, General Inspector of Treasury Control and the vice-minister of the Polish Finance Ministry, told Polish economic daily Puls Biznesu on March 26.
In such offices there are no paper documents, no briefcases with invoices or cash boxes. There also are no accountants, secretaries or cleaners, so no people that could witness any crime and that could be potential sources of information.
According to statistics presented in a report detailing fiscal controls carried out in 2013, out of the 550 virtual offices that the fiscal authorities selected for an audit, in almost 500 of them the authorities encountered troubling signs such as a lack of a company representative to speak to or a lack of accounting records. In such cases, the authorities submitted those companies to a thorough, follow-up audit.
Audits of only 140 of those 500 virtual offices led the fiscal authorities to uncovering fiscal irregularities and fraud estimated to come to PLN 1.2 bln. This would mean that each company attempted to cheat the taxpayers for about PLN 7.4 mln.
Krolikowska said that fiscal authorities are aware that virtual offices can and are also used by honest taxpayers to conduct preliminary market research to see if a business idea is economically viable. In such cases authorities do not undertake auditing procedures.