Spanish police detain 18 for major CD sales tax fraud

4th April 2009, Comments 0 comments

Spanish police said Friday they had arrested 18 people suspected of sales tax fraud involving the sale of CDs and DVDs that may have cost state coffers over seven million euros (nine million dollars).

MADRID - The group set up front companies in Portugal and Britain which would buy large quantities of CDs and DVDs from a major Spanish distributor, according to police.

By doing so, they allegedly took advantage of an exemption from the national sales tax enjoyed by goods sold to other European Union member states.

They were then able to sell these goods in Spain at a far lower price than their competitors who had paid the sales tax as required by law, police said in a statement.

In some cases the goods were delivered to the front company in Portugal and then immediately sent back to Spain while in others the CDs and DVDs never left Spain, it said.

Police carried out 22 searches of homes and companies as part of their investigation, including eight in Portugal.


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