Recently, a Chinese veteran seller active in the European cross-border e-commerce field was arrested on the spot by the Italian police for multiple tax crimes.
It is reported that the seller was identified by the police as the actual controller of a cross-border e-commerce group, whose cross-border e-commerce business is distributed across multiple sites in Europe. The regular bankruptcy behavior of several companies under the group has attracted the attention of the police, resulting in a total tax deficit of about 5 million euros (about 40.98 million yuan).
The media reported that during his business in Italy, the seller would frantically open new cross-border companies every year, and at the same time, frantically close these old cross-border companies he had established. Each company existed for more than a year.
At first, people thought this was another cross-border e-commerce myth created by cross-border sellers in Europe, until the arrival of the Italian police, when the truth was gradually revealed.
It turns out that the reason why this seller frantically opened and closed companies was mainly for the following so-called "tax avoidance" model:
1. Open a new cross-border e-commerce company with different legal status and address.
2. Make a fortune, with the annual turnover of the new company controlled at around 30 million euros.
3,not paya penny of tax, and as soon as the tax bill is about to arrive, immediately let the company go bankrupt and close down.
4, change the name, change the shell, and repeat the above action.
What's more outrageous is that when the old company declares bankruptcy, almost the entire set of this company, including employees, warehouses, inventory, store accounts, etc., is moved to another company, every time it's like this.
However, this unusual move caught the attention of the Italian police. After an in-depth investigation, the police discovered an unusual pattern.
The survival time of all new companies established under this company isless than two years, and the annual turnover of each company can reach about 30 million euros. The cumulative turnover of all new and old companies over the years exceeds 1 billion euros, but how much tax has been paid?
After auditing the company's accounts and cash flows, the Italian Tax Authority concluded: The taxes paid by these companies are almost negligible.
Moreover, the time when this company chooses to "close" is also very similar, that is, when the tax bill arrives. As soon as the tax bill arrives, the company immediately chooses to "go bankrupt".
After this process was successful in Italy, the seller also extended this method to Germany,, Spain,and the UK. Currently, Italy is under investigation, and other countries will also launch investigations into this tax evasion case.
In Italy, tax fraud exceeding5 million euros is considered"particularly serious"
