The trial of eight defendants, consisting of six individuals and two companies, commenced today, concerning charges of criminal association and qualified tax fraud, dating back to 2021.
Between February of that year and December 2023, the defendants engaged in the purchase and sale of used vehicles within the European Union and their subsequent sale in Portugal, while failing to pay VAT, resulting in a loss to the state exceeding 750,000 euros.
This morning, at the first court session in the Tribunal of S. João Novo, Porto, only one defendant broke their silence, admitting to the panel of judges that they issued invoices under the margin scheme rather than the general scheme, based on instructions from the managers of the two companies and without necessary documentation, acting in a “naive” manner.
The margin scheme is a special regime where VAT is applied only to the difference between the purchase and selling prices, i.e., the gross margin obtained by the reseller.
In court, the defendant, responsible for the accounting of both companies, clarified that invoicing was done using this scheme, despite the absence of purchase documentation, bank statements, and inter-community transactions, “always with the expectation that the documentation would be provided.”
“I did the accounting as best as I could, but there was a lot of missing documentation,” he stated, elaborating that he requested the documentation several times, but it was never provided, leading him to invoice under the margin scheme.
He was unable to explain why invoices were issued in a ‘Word’ format rather than a certified program, clarifying only that he did not report the irregularities to the Tax Authority, as was his duty, because he was unsure if they existed.
According to the prosecution, the used vehicles were bought in the community market through companies set up in the names of other individuals, with limited temporal duration, and subsequently sold in the national territory via internet ads or by placing the vehicles in car dealerships on consignment.
The defendants “omitted the payment of due taxes by improperly selling the vehicles under the margin scheme, issuing invoices with VAT amounts lower than legally required, or selling the vehicles without issuing any invoices,” according to the prosecution.
The investigation recorded 209 acquisitions of vehicles in EU countries, valued at over 2.5 million euros, and their sale in the national territory for more than four million euros during this period.
“As a result of this conduct, the defendants failed to deliver VAT amounting to 755,183.22 euros to the State.”
