According to Kristi Veskus, head of VAT at the Tax and Customs Board, the most errors were detected in VAT refund applications, which companies had to correct more than 900 times, totaling 18.4 million euros.
“Although the submission of baseless VAT refund claims has increased this year, MTA’s risk models detect them effectively, so we should not hope that such frauds will go unnoticed by us,” noted Veskus.
“In terms of the content of other violations, the most common ways of evading taxes to pay an envelope salary are still taking money out of the company either by concealing the turnover or by using fictitious purchase invoices,” explained Veskus. In total, such violations have been identified in the first seven months of the year for 300 companies, whose tax obligations were increased by a total of 4.2 million euros.
This year, the MTA is focusing on violations related to real estate transactions, which cause an estimated 9.3 million euros in VAT losses to the state. In their case, the main violations are failure to declare turnover from real estate sales transactions and unjustified refund claims from the acquisition of residential premises acquired in the name of companies, but not used for taxable business activities. Violations related to real estate transactions were detected in 136 cases in 7 months, totaling 2.5 million euros.
Also, MTA continues to pay close attention to companies not registered for VAT, in which, based on various risk characteristics, there is reason to believe that they may have met the threshold for VAT registration and incurred VAT liability, but who have not fulfilled these obligations. Such companies were assigned additional tax liabilities in the amount of 1 million euros in 7 months, which is 14% more than at the same time last year.
In total, as of the beginning of 2023, the MTA has mapped nearly 20,000 entrepreneurs whose declared data have identified possible VAT risks and who cause an estimated tax loss to the state in the amount of EUR 94.4 million.
Source: emta.ee
