The Guardia di Finanza (GDF), Italy’s financial police, has discovered widespread tax evasion throughout the country involving more than a thousand Chinese textile companies and the avoidance of some EUR300m (USD400m) in taxes.
The whole scheme was discovered when the GDF made other, unconnected, investigations into the use of clandestine workers. It was unveiled through ten Chinese companies in Emilia Romagna, Tuscany, Marche and Lombardy, and their issuance of the false invoices necessary to reduce their earnings. None of the companies had ever made a tax declaration.
At the end of the investigation, the GDF had found 1,200 Chinese companies in Italy to be involved in the false invoice scam, at the cost of around EUR250m in income tax and EUR45m in unpaid value added tax.
According to a reconstruction by the GDF, second-generation Chinese, graduates of Italian universities, had provided the “brains” behind the scheme, when becoming financial advisers to Chinese businesses in Italy.
It was, in fact, in 2008, that the GDF in the province of Ferrara had first come upon factories of Chinese workers working at their sewing machines by night, surrounded by material. Those workers also lived and slept within the walls of the factories, never venturing into the outdoors and, therefore, unbeknown to other surrounding businesses.
The whole scheme was discovered when the GDF made other, unconnected, investigations into the use of clandestine workers. It was unveiled through ten Chinese companies in Emilia Romagna, Tuscany, Marche and Lombardy, and their issuance of the false invoices necessary to reduce their earnings. None of the companies had ever made a tax declaration.
At the end of the investigation, the GDF had found 1,200 Chinese companies in Italy to be involved in the false invoice scam, at the cost of around EUR250m in income tax and EUR45m in unpaid value added tax.
According to a reconstruction by the GDF, second-generation Chinese, graduates of Italian universities, had provided the “brains” behind the scheme, when becoming financial advisers to Chinese businesses in Italy.
It was, in fact, in 2008, that the GDF in the province of Ferrara had first come upon factories of Chinese workers working at their sewing machines by night, surrounded by material. Those workers also lived and slept within the walls of the factories, never venturing into the outdoors and, therefore, unbeknown to other surrounding businesses.
