VAT fraud in the grain trade sector

Hungarian cereal producers are held to account in a case where a network of Hungarian and Italian companies were involved in EU-level tax fraud between 2007 and 2010. The case came to light after last year a Hungarian tax authority whistle-blower reported that illegally evaded VAT in Hungary equals to 5-6% of the country’s GDP. According to the account of cereal producers who contacted atlatszo.hu, the tax authority started to investigate the tax evasion in order to collect from them the unpaid EUR 6.5 million. The network exploited an EU regulation which allows certain EU member country companies to buy and sell zero-rated goods; Italian companies bought the grain which was transported according to the documentation to Italy, but in reality it has never left Hungary and it was sold charged with VAT. At the moment, cereal producers are under investigation for being knowingly involved in carousel fraud.

Read this article in Hungarian here, the original text was posted on 30 January 2014.