Finance Minister: Tax Evasion is a Steal from the Citizen's Pocket

The National Anticorruption Directorate (DNA) and the National Tax Administration Agency (ANAF) have launched an investigation that has revealed a new tax evasion scheme in the second-hand car trade, with an estimated damage of 29 million lei. According to investigators, a company allegedly abused the special margin regime (a specific procedure within the VAT legislation to support second-hand product traders), declaring fictitious values to avoid paying taxes to the state. Finance Minister Alexandru Nazare reacted after the announcement of the investigation, emphasizing the importance of restoring legality and recovering money lost through tax fraud. "No one should be above the law, and justice is restored when the money that has been leaking out of Romania for years through large-scale fraud and tax evasion schemes finally ends up where it belongs: in the state budget, for investments that really matter - in education, health and other public priorities,” the minister said in a message published on Facebook. Nazare added that ANAF, through the General Anti-Fraud Directorate, will continue its checks in collaboration with the DNA, including in Ilfov and Prahova counties, where some of the current checks are being carried out. "Tax evasion is not just a crime, but a direct theft from the citizen's pocket. It is the number 1 objective of ANAF and the only path to a fair state that truly respects its citizens,” Alexandru Nazare said.

• How the fraud scheme worked

According to the press release sent by ANAF, the targeted company allegedly illegally used the special margin regime for all car sales, both to individuals and legal entities, from Romania and other states. The cars had not been purchased on margin, but the company declared an artificial margin of approximately 100 euros (including VAT) for each vehicle, significantly reducing the amount of tax due. Also, some of the trading partners in the European Union did not have a valid VAT registration code, which excluded the exemption from payment.

• Network with shell companies and successive insolvencies

Investigations by anti-fraud inspectors revealed a repetitive practice by which the same network of people successively established new companies, accumulated debts, then requested insolvency to avoid forced execution. The modus operandi, ANAF specifies, included: the successive opening of commercial companies; abusive application of the margin regime; accumulation of significant debts to the budget;

requesting insolvency in order to evade payment. In parallel with the DNA investigation, the regional structures of the General Anti-Fraud Directorate (DGAF) are monitoring intra-community transport of cars at the western borders, where the phenomenon of evasion is frequent.

ANAF warns that the used car market is seriously affected by illegal practices, which distort competition and put honest companies in difficulty. "The second-hand car market is affected by illegal commercial practices, which distort competition and disadvantage honest companies. ANAF draws attention to the legal consequences of not declaring taxes and reaffirms the importance of complying with tax obligations," the institution's press release states. The checks will continue, and the authorities promise an integrated approach, based on advanced risk analysis and digital tools, to clean the market of "unfair players" and ensure fair tax competition.