October 28, 2016
Romania has become the latest country to make headlines as authorities clamp down on tax evaders, with two industry titans facing potential charges. In the first case, the country’s ‘Wine King’, George Ivanescu – shareholder of one of the largest Romanian wine producers – was arrested and detained this month along with nine other individuals. All are under suspicion of tax evasion or involvement in this activity.
According to the National Anticorruption Department, three other associates in companies that manufacture and sell alcoholic beverages were detained for 24 hours along with Ivanescu. The four companies involved allegedly evaded around €130 million in tax payments between 2010 and 2014.
In a rather controversial move, three directors from tax agency ANAF, the National Customs Authority and the Ministry of Finance were detained in connection with the above allegations. These individuals face accusations of abuse of office by helping each of the companies evade correct tax payments.
While investigations are ongoing, the majority of the defendants are currently facing preventive arrest at the request of prosecutors.
The second high profile arrest in Romania this month was that of the Turkish ‘Biscuit King’, Halil Bulut, owner of one of the country’s biggest producers of biscuits and crackers, Rostar. It is claimed that Bulut, along with several associates including the company’s accountant, set up an organised crime group which was used to include false documents in the firm’s accounts. This activity meant that Rostar avoided paying taxes to the Romanian state between 2011 and 2015 equivalent to €3.71 million. While investigations are carried out, Bulut and his associates face an initial 30 day jail term.
While each of these industry titans may have felt they were being clever with their strategy, these examples prove that it is never sensible to knowingly evade tax payments. And while the world of tax can be complex to navigate, particularly across borders, mistakes will also not be tolerated by authorities, so it’s always best to err on the side of caution and partner with an expert to ensure you remain fully compliant with local legislation.
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