Bekæmpelse af organiseret skatte- og momssvig med fokus på fakturafabrikker

Abstract

White-collar crime is an increasing problem in Denmark and there has been a higher public awareness after the TV program "The Black Swan". Everybody seems to be discussing the issue of money laundering through so-called “invoice factories”. An “invoice factory” is a company designed to issue fictitious invoices to other companies, and normally there are no underlying basis for the invoice issued.
The fraud occurs when the so-called “invoice factories” send a fictitious invoice to a legitimate company, allowing that company to gain an unwarranted tax and VAT deduction. The payment that the legitimate company transfers to the “invoice factory” is returned to the legitimate company in cash minus a small commission. This cash is used to pay salary to unregistered employees of the legitimate company without withholding taxes and without the mandatory reporting. Thus, no service is ever delivered from the “invoice factory” to the legitimate company. The fraud can also occur by inserting another link, i.e. so that the recipients of the fictitious invoice receive a service, but from someone other than the “invoice factory”. This means that it gets harder for the legitimate company (and everybody else) to determine that this is fraud. The Danish Tax Agency reports that it has registered 151 “invoice factories” that have collectively issued fictitious invoices totaling 4.2 billion DKK to 4,650 unique customers.
We will examine what the applicable law state regarding the tax and VAT treatment of the “invoice factories” and the buyers of the invoices. This will be uncovered by reviewing the legislation and the case law that has been dealt with in various judicial instances. We will highlight the case law that is particularly relevant for assessing whether a company could achieve a tax and VAT deduction, when it has received a fictitious invoice from a subcontractor. This includes how an “invoice factory” without real operations should be treated from a tax and VAT perspective.
We will also discuss whether it is possible to bring criminal charges against those involved with the “invoice factory”. We will outline the fundamental conditions that must be present to determine a criminal liability. Additionally, we will explain the consequences of violating the criminal provisions and highlight the other sanctions available to the tax authorities to combat this type of crime.
We will review the rule of law aspects that the authorities should observe concerning individual’s obligation to provide information during tax and VAT controls.
The thesis will examine whether there is sufficient legal authority to investigate those involved in and around the “invoice factory”. Is there a need for additional legal authority or is it a question of resources from the authorities?