Seven individuals, T1 to T7, were charged with a series of serious violations of the VAT Act, the Withholding Tax Act, and the Collection Act. They were accused of being involved in 14 main companies as actual owners, directors, or accomplices in deducting fictitious invoices related to the sale of goods and services from various temporary employment agencies, which they also controlled. Additionally, they were accused of failing to correctly report VAT or withhold withholding tax in both the temporary employment agencies and the main companies. These actions resulted in a total evasion of DKK 20,001,561 in VAT, DKK 3,563,705 in A-tax, and DKK 715,840 in AM contributions. The defendants pleaded not guilty.
The City Court found the defendants guilty as charged. The City Court determined, among other things, that the invoiced goods were not delivered to the main companies and that the employees who performed the tasks according to the invoices from the temporary employment agencies were, in reality, employed by the main companies that the invoices were issued to, rendering the invoices fictitious. Furthermore, it was established that the 14 main companies were partially operated from the same premises where T1, T3, and T6 had their offices and were present daily. The financial records of the 14 main companies were also found in the aforementioned premises. The individuals registered as directors in the temporary employment agencies during the period in question appeared to lack significant personal, educational, or professional qualifications to run the businesses in question. The Court also found that T1 made significant decisions regarding the daily operation of the companies and was heavily involved in the issuance of fictitious invoices.
The City Court sentenced T1 to 2.5 years in prison, an additional fine of DKK 9,850,000, and forfeiture of rights. The City Court emphasized that T1 was responsible for issuing the fictitious invoices and was fully aware of their lack of authenticity. T2 was sentenced to 4 years in prison, permanent entry ban, and forfeiture of rights. The Court considered T2 responsible for the operation of numerous temporary employment agencies. T3 was sentenced to 1 year and 3 months in partly conditional prison, an additional fine of DKK 5,025,000, and forfeiture of rights. T4 was sentenced to 60 days in conditional prison and an additional fine of DKK 425,000. T5 received a 1-year and 3-month suspended prison sentence. T6 was sentenced to 1 year and 3 months in partly conditional prison, an additional fine of DKK 4,600,000, and forfeiture of rights. T7 was sentenced to 60 days in conditional prison and an additional fine of DKK 275,000.
T3, T6, and T7 appealed the City Court’s judgment, seeking acquittal or, alternatively, a reduction in the penalties. The Eastern High Court upheld the City Court’s judgment with some modifications, increasing T3’s sentence to 1.5 years in partly conditional prison and raising the additional fine to DKK 5,575,000. T7’s sentence was reduced to 40 days of conditional prison due to being found guilty of evading only DKK 295,000 in VAT.
Source: info.skat.dk
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