"Open and close" VAT number scam: 1,200 closed

“Open and close” VAT number scam: 1,200 closed

In just a span of two and a half months, almost 1,200 vat number And another part of the 500 companies, which have issued invoices with a total value of 2 billion euros, are now the subject of careful scrutiny by the financial authorities. The revenue agency is now focusing its efforts on so-called “open and closed” VAT numbers, ie companies that have existed for only a short time, often in order to commit scams. Apart from this, cases of VAT numbers which have been inactive for a long time are also on target.

How the “open and close” VAT number scam works

As of last July 31, the agency, under the guidance of Ernesto Maria Ruffinisuspended 800,000 VAT numbers for a period of three years. As per the provisions of the Consolidated Income Tax Act, these taxpayers will soon be informed of the upcoming closure of the tax office. The text establishes that the VAT number can be terminated if, in the last three years (specifically in 2019, 2020 and 2021), the company has not submitted a VAT return, nor declared business or self-employment income Is.

Within 60 days of the agency’s official announcement, taxpayers have the opportunity to provide a detailed explanation and possibly block the closing process.

The dynamics are very different for companies and professionals who open and close their businesses very quickly, often trying to avoid paying taxes. Thanks to new provisions introduced in the latest budget law, the revenue agency is equipped new control devices which appear to be effective in counteracting such behaviours. Now, there is a suspension of economic activity for VAT numbers characterized by a profile of “serious and/or systematic evasion and fiscal non-compliance” in the context of short-term activities.

Under these circumstances, there is no possibility of fudging. Those who have a suspended VAT number may request another number by simply presenting a Three-year guarantee of at least 50,000 Euroor an amount in proportion to the contravention committed.

VAT numbers level off, mostly in Lombardy and Lazio

In mid-May, Ruffini, director of the Revenue Agency, outlined criteria for identifying VAT numbers subject to control, which focused on the occurrence of “open and closed” items. Following the execution of these checks, within a few weeks, approximately 1,200 VAT numbers were cancelled. Of these, a significant share is represented by 359 from Lombardy and 254 from LazioThis was followed by 166 in Campania, 105 in Tuscany and Veneto, often attributed to foreign nationals.

It should also be emphasized that, through passing the newly introduced control criteria, among other information, they have come to light 500 more VAT numbers to be opened in the years 2021 and 2022, which requires further investigation. These companies have unusual subjective characteristics and conduct economic operations of significant size. The total invoices under verification reach the figure of 2 billion euros, each with an average amount of around 4 million euros.

These control actions complement previous measures launched in 2020, aimed at identifying so-called “paper mills”, ie companies with no real activity that issue false invoices. These practices generate non-existent credits, which are used to defraud the tax system. Since then, 348 of these situations have been detected and stopped, resulting in fraudulent invoicing totaling €2.8 billion.





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