Polish budget loses billions due to mobile phone VAT tax scams
The Polish budget may have lost as much as PLN 1.8 bln due to VAT tax fraud connected the with mobile phones market. The scale of such scams is growing rapidly each year.
“EU member countries imported mobile phones into Poland worth nearly EUR 1.4 bln in 2012, based on Eurostat’s data,” read the report on the subject prepared by the international law firm DLA Piper, as cited by a Polish daily, Gazeta Wyborcza, March 25. “According to data sent to Eurostat by Poland, the value of imports of mobiles into Poland in 2012 was around EUR 1 bln, showing a 40 percent difference. A similar discrepancy was reported for the first ten months of 2013 and amounted to almost EUR 436 mln.”
Detailed data revealed that Czech mobiles import declarations Poland came to EUR 67.3 mln, while according to Poland’s declaration the value was only EUR 33.1 mln. The scale is even larger with regard to mobiles traded with Germany.
Germans declared imports to Poland of EUR 300.7 mln, while Poland reported only a value of EUR 180.3 mln.
The comparison of data submitted by the UK and Poland also shows this discrepancy. The UK reported imports as EUR 185 mln and Poland only as EUR 13.8 mln.
“This proves that a chunk of the mobile phone trade between Poland and EU countries is not registered by Polish tax authorities, and therefore it is fair to assume that it is not a subject to taxation in Poland,” says DLA Piper, as cited by the paper. “The current statistics connected with trading of mobile phones are very similar to past data on steel products prior to change in Polish tax regulations.”
It is also worth mentioning that in 2013, with no domestic production of mobile phones in Poland, the value of exports of mobiles exceeded the value of imports by PLN 2.3 bln, based on DLA Piper report. This would suggest not only that no retail sales of mobile phones is taking place in Poland, but also that Poland in fact manufactures mobiles itself. DLA Piper estimated that Polish budget loses at least PLN 420 mln due to this procedure, however, the real loss could be much higher and as high as much as PLN 1.8 bln.
According to the law firm, the aforementioned tax scam can be mitigated in a very simple way. DLA Piper proposes the introduction of reverse tax liability regulations on the mobile phones market. These regulations already proved to be successful in preventing fraud on the steel, fuels and gold markets in Poland and according to the law firm should help also in case of mobile phones.
Photo courtesy of 阿貴