Based on the preliminary information from the MTA and the Police and Border Guard Board, the wholesaler used dummy companies and middlemen under the control of a criminal organization to increase VAT refunds.
Purchasing the product was left to the shell companies who in turn sold it to middlemen, during this transaction the VAT requirement was not fulfilled. The next step was to hand the product over to the wholesaler who had the right to deduct VAT.
The head of the Investigation Department at the MTA, Rain Kuus, said that using shell corporations for avoiding tax obligations or for increasing tax refunds is a common scheme and used widely.
The Northern District Prosecutor, Stella Veber, said today a criminal investigation has began into the case, adding that similar schemes are of a growing concern and international cooperation is essential.