50 German Companies Raided for Emission Allowance Carousel Fraud

Yesterday, German prosecutors raided 230 offices of 50 German companies in an investigation into alleged VAT tax evasion of EUR 180 million using emission allowance trading.

In a “VAT carousel”, emission allowances were allegedly bought from foreign companies and sold in Germany via a chain of corporations for the purpose of evading value-added tax. The companies involved did not declare or pay VAT. The company at the end of the chain sold the emission rights to companies abroad and claimed input VAT (Vorsteuer) with the competent tax and revenue office.

According to Europol, Europe lost about EUR 5 billion in tax revenues because of VAT tax fraud relating to emission allowances.

Source: Spiegel Online