Saxony's tax investigators uncover a fraud worth millions

Tax Investigations Essential for Democracy and Trust

For Finance Minister Christian Piwarz, however, the value of tax investigators’ work lies not solely in the money that benefits the treasury. “Effective tax investigations are essential for a functioning democracy,” said the CDU politician. “If tax loopholes and tax fraud are tolerated, not only does tax fairness suffer, but so does trust in the rule of law,” he emphasized.

Tax evasion weakens the community and social solidarity and leads to political mistrust. Those who accept inequality before the law not only jeopardize tax revenue but also endanger social cohesion and democracy.

European Public Prosecutor’s Office: A Partner in Investigations

According to the ministry, the European Public Prosecutor’s Office has now become an important partner for Saxony’s tax investigation unit. More than half of the uncovered tax losses are the result of joint investigations. In the process, investigators uncovered several so-called VAT carousels—a form of organized tax evasion.

Fraud in the Trade of AirPods

“Fraudsters exploit EU regulations on cross-border VAT exemptions (intra-Community supplies) to obtain input tax refunds from the tax office without first paying the VAT to the state,” the Ministry of Finance explained. 

Among other things, investigators uncovered a VAT carousel involving the trade in Apple AirPods, as well as a case of organized VAT evasion in the telecommunications sector. Investigations are ongoing in both cases.

Customs duties evaded and sales tax diverted from the tax authorities

Tax investigators, in collaboration with partners, dealt another blow to the international auto trade. The operation, codenamed “Nimmersatt,” involves the import of accident-damaged vehicles from the U.S. “The damaged vehicles were only superficially repaired in the Baltic states and sold to end customers across Europe,” officials said. In the process, customs duties were allegedly evaded and sales tax amounting to millions was diverted from the tax authorities. The investigation is ongoing.

Last year, Saxony increased the number of tax investigators by 15 to 130 full-time positions. “However, the challenges and complexity of the investigative work carried out by local tax investigators are constantly increasing. Against this backdrop, further organizational measures are planned for Saxony’s tax investigation unit,” the ministry announced.

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