VAT fraud and corruption scandal
in Hungary

A growing number of evidence is coming to light which indicate that corruption at governmental level makes large scale VAT (value added tax) fraud possible in Hungary. A whistleblower, former employee of Hungary’s National Tax and Customs Administration (NAV), András Horváth first disclosed the details at a press conference on 8 November 2013. Horváth has submitted a report to Hungary’s Chief Prosecutor, backing his statement with documentary proof.
According to official estimates, the sum of the illegally evaded VAT and illegally reimbursed VAT in Hungary equals 5 to 6 % of the GDP. Horváth’s investigations show that main actors of VAT fraud in Hungary are not private persons or small enterprises, but highly organised criminal groups which established close relations with the state administration. These criminal groups have been carrying out illegal activities already for many years and they are assisted by officials within the tax authority. The main beneficiaries of the VAT fraud are several retail chains and big exporting companies.

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Background materials

The state of combating tax fraud networks in Hungary and its neighboring countries (21 pages), 08-11-2013,

Proposal for the European Commission concerning the “Combating tax fraud and evasion – Commission contribution to the European Council of 22 May 2013”, 16-05-2013,

Organised forms of tax evasion and their management by the government in certain Eastern-European Member States - Presentation at the conference on the 4th of February 2015 in the European Parliament

Video

Video (with English subtitles) of the press conference where the whistleblower András Horváth for the first time disclosed his findings to the public about the VAT fraud networks and the related high-level government corruption, 08-11-2013,

Text of the video

http://greenmediabox.eu/en/ct/72-VAT-frauds-in-EU-Member-States-and-the-competence-of-the-EU-Institutions, 04-02-2015

Press materials by the Clean Air Action Group, atlatszo.hu, Hungarian Civil Liberties Union (TASZ) and Transparency International Hungary

Corruption in government helps enormous VAT fraud in Hungary (Press release), 08-11-2013

We call for substantive investigation into what recently happened at the National Tax and Customs Administration! 14-11-2013

Speech is silver, silence is golden, 27-11-2013

Authorities should investigate the VAT fraud scandal instead of pestering András Horváth! 19-12-2013

The criminal proceedings against András Horváth might be unlawful, 21-12-2013

Minister sheds some light on VAT fraud and government corruption in Hungary, 23-12-2013

Demonstration in Budapest for the investigation of tax fraud scandal, 28-12-2013

Brussels once more rejects Hungarian request for reverse VAT, 12-05-2014

Why dismiss investigating tax fraud? An assortment of reasons, 24-05-2014

Press appearances

https://reportingproject.net/occrp/index.php/en/ccwatch/cc-watch-briefs/2212-hungary-whistleblower-alleges-corruption-in-vat-fraud

http://www.bbj.hu/politics/tax-inspector-huf-17-trillion-in-vat-fraud-run-up_71912

http://www.budapesttimes.hu/2013/11/23/tax%C2%AD-evasion-ok-for-some/

http://hetq.am/eng/news/30726/

http://www.politics.hu/20131127/ex-tax-auditor-says-economy-minister-knew-about-alleged-tax-fraud/

https://hungarianspectrum.wordpress.com/2013/11/19/tax-fraud-scandal-in-hungary/

http://www.budapesttimes.hu/2013/12/06/whi%C2%ADstle-blown-again/

http://www.bbj.hu/politics/fidesz-tax-fraud-must-be-punished_72911

http://www.xpatloop.com/news/hungarys_fidesz_says_tax_fraud_must_not_go_unpunished

http://www.reuters.com/article/2012/06/07/us-hungary-vat-fraud-idUSBRE85614B20120607

http://www.reuters.com/article/2012/06/07/us-hungary-vat-fraud-idUSBRE85614B20120607

http://www.pesterlloyd.net/html/1346finanzamthorvath.html

https://reportingproject.net/occrp/index.php/en/ccwatch/cc-watch-briefs/2212-hungary-whistleblower-alleges-corruption-in-vat-fraud

http://www.bbj.hu/politics/tax-inspector-huf-17-trillion-in-vat-fraud-run-up_71912

http://www.budapesttimes.hu/2013/11/23/tax%C2%AD-evasion-ok-for-some/

http://hetq.am/eng/news/30726/

http://www.politics.hu/20131127/ex-tax-auditor-says-economy-minister-knew-about-alleged-tax-fraud/

https://hungarianspectrum.wordpress.com/2013/11/19/tax-fraud-scandal-in-hungary/

http://www.szuperinfo.hu/tax-office-files-report-to-police-against-former-employee/2424741

http://www.xpatloop.com/news/75199

http://the-eastland-journal-ck.blogspot.be/2013/11/vat-fraud-scandal-in-hungary.html

http://browse.feedreader.com/c/Hungarian_Spectrum/757546203

http://www.euronews.com/2013/12/23/hungary-persecutes-those-who-fight-against-corruption-/

http://www.xpatloop.com/news/xpat_opinion_police_raid_on_the_tax_authority_whistleblower_in_budapest

http://www.politics.hu/20131209/socialists-join-lmp-petition-to-set-up-committee-to-probe-vat-fraud/

http://www.politics.hu/20131208/orban-has-met-his-waterloo-in-vat-scandal-say-socialists/

http://budapestbeacon.com/news-in-brief/police-search-home-of-nav-whistleblower-andras-horvath/

http://hungarianspectrum.wordpress.com/2013/12/20/the-plight-of-a-hungarian-whistleblower/

http://www.bbj.hu/politics/fidesz-tax-fraud-must-be-punished_72911

http://www.xpatloop.com/news/75448

http://www.politics.hu/20131228/tax-office-denies-request-for-report-on-probe/

http://www.politics.hu/20131228/opposition-mps-join-protest-in-support-of-former-tax-official-who-alleges-fraud/

http://www.freehungary.hu/index.php/56-hirek/2463-hungary-s-financial-scandal-vat-fraud-the-case-of-sovereign-sugar

http://budapost.eu/2014/01/tax-amnesty-for-investors-in-government-bonds/

http://www.politics.hu/20140117/opposition-politicians-turn-to-top-court-over-fidesz-hacking/

http://www.bbj.hu/business/report-90percent-of-sugar-burdened-with-tax-fraud_74311

http://hungarianspectrum.wordpress.com/2014/01/04/what-do-sugar-distribution-and-drag-racing-have-in-common-a-lot/comment-page-1/

http://budapestbeacon.com/news-in-brief/whistleblower-accuses-government-of-emasculating-hungarys-tax-authority-nav/

http://budapestbeacon.com/public-policy/european-experts-discuss-vat-fraud/

http://dailynewshungary.com/politicians-whistleblowers-turn-to-ep-cttee-over-hungary-vat-fraud/

http://www.greens-efa.eu/vat-fraud-in-the-eu-13504.html

http://budapestbeacon.com/public-policy/former-tax-auditor-says-hungarys-tax-authority-is-lying/

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Deutsch

http://www.pesterlloyd.net/html/1346finanzamthorvath.html

http://www.budapester.hu/2013/11/29/un%C2%ADs-stehen-maechtige-personen-gegenueber/

http://www.whistleblower-net.de/blog/2014/01/10/druck-auf-whistleblower-in-ungarn/

http://www.pesterlloyd.net/html/1351horvathhausdurchsuchung.html

http://de.euronews.com/2013/12/29/der-ungarische-edward-snowden/

http://www.pesterlloyd.net/html/1352demosteuerskandal28.html