Tax Board and Leasing Companies Clamp Down on Tax Fraud Involving Expensive Cars
The Tax and Customs Board announced today that it made an agreement with the Estonian Leasing Association to straighten out the used cars market and share information to clamp down on tax fraud with expensive cars.
The most common fraud scheme involves bringing more pricey used cars to Estonia and skipping paying VAT on them, Reet Hääl, the managing director of the Estonian Leasing Association told Äripäev today.
The cars are usually more expensive and their brand, date and price may not always add up, while check-ups are time consuming, Hääl said.
The fraud scheme involves a small company importing the car and then folding shortly afterwards. The warning signs are usually in the description of the car that sometimes claims “the vicar’s wife only went shopping with it once, it’s never been used or it’s been in a garage and that’s why the condition is so good,” Hääl said.
The efforts of the tax board are bearing fruit because schemes of this kind on a mass scale have stopped, she said.
According to the co-operation agreement, the tax board will get updates from the Estonian Road Administration in real time about requests to register expensive cars.
An assessment with the Estonian Association of Car Sellers and Services will be made about possible tax fraud and if so, the tax board will immediately forward the information to the road administration, which will then take 30 days to process the registry application, enabling thorough background checks.