Argentina: Tax Evasion in onion exports
The AFIP conducted 14 simultaneous raids in Mar del Plata, Buenos Aires and Misiones, to disrupt a complex organization that sold onions to Brazil, which evaded nearly 500 million pesos in taxes.
Marketing was performed marginally for some 1,000 million pesos, which would mean an avoidance of 500 million pesos in respect of VAT and income tax. The Federal Justice of Bahia Blanca and officials of the DGI, the DGA and the DGRSS intervened in the proceedings.
The raids were conducted on notaries, accounting firms, customs brokers and in several locations that made and provided apocryphal documents to facilitate their manoeuvres, such as sales invoices, agribusiness guides etc.
In the raids conducted today, agents of the AFIP collected proof that demonstrated that the actual sellers of onions were not registered with the agency. The AFIP reported in a press release that they had also seized documents, evidence of the complex engineering design that several professionals did to facilitate their illegal actions.
All the information collected by the agents of the AFIP is in the hands of the Federal Court of Bahia Blanca, in order to determine the degree of culpability of each of the members of the criminal organization.
The thorough investigation of the AFIP was aimed at unravelling a complex organization that began its operations with local producers of South western Buenos Aires who were not enrolled before the tax authorities and who had unregistered employees that were typically working in sub-human conditions.
A Brazilian importer would be responsible for the intellectual and logistical components of the scheme (through the establishment and use of shell companies), as well as of the financing of the operation by sending currency exchange outside the formal system.
The AFIP discovered this illegal operation and denounced domestic and foreign trade, plus the consequential tax debts, headed by natural and insolvent corporations between 2012 and 2013.
So far this year, using route controls, the AFIP seized about 1,000 tonnes of onion in transit, mostly going to Brazil, because of inconsistencies and false documents as described above.
The onion production chain consists of planting, harvesting, marketing and export. Irregularities were found in all of the links and the investigation aims to identify all intermediate players that provided technical or professional assistance for tax evasion, such as notaries, lawyers, accountants and finally customs brokers.
