Brussels (Brussels Morning Newspaper) – European Public Prosecutor’s Office (EPPO) latest report revealed a massive fraud connecting import from Chinese e-commerce platforms like Temu, costing Belgium an estimated 611 million euros, De Standaard reported.
Based on the report, in a few years, the online e-commerce platforms, together with a few other big players from China, have caused a revolution in e-commerce. However, these immensely popular sales channels also enable fraudsters to commit billions in fraud.
European Public Prosecutor for Belgium, Van Den Berge said that this whole development is not only connected to tax fraud, but also to drug trafficking and human trafficking. He further said,
“They use the money they get from their fraud to organise other forms of crime, such as smuggling routes or boats for drug trafficking. With the profits from drug or human trafficking, they set up companies. Sometimes part of it is legal, but usually they are used to commit fraud, especially with VAT and customs charges.”
Why is Belgium a hub for fraudulent Chinese imports?
Ludovic Andreacola, coordinator of the team at EPPO that hunts for customs fraud, says that with its ports and, above all, the airport of Liège Bierset, Belgium is the European hub for Chinese imports.
“Every night, 150,000 to 200,000 parcels from China arrive in Bierset,”
In 2023, there were 400 million import declarations at customs, last year that had already risen to one billion.
“On the other hand, there are 3,200 customs officers, for the whole country,”
Andreacola notes.
In 2024 alone, the Belgium’s branch of EPPO had 79 ongoing investigations, 13 of which were regarding VAT fraud. The damage is calculated at 611 million euros, out of a total of 1.47 billion in all Belgian investigations.
What methods do criminals use to evade VAT taxes?
According to Van Den Berge, criminals employ two main methods to execute fraud. Some set up fake firms with VAT numbers and pretend to export goods to another European Union country to evade tax. “The first is through fictitious sales. The criminals set up a company, including a VAT number and a nice website. They make it seem as if they have produced a lot of goods and that they export them to another country, where they would ultimately pay the VAT. With that argument, they defraud the tax authorities in their home country.”
The second method of fraud according to Van Den Berge is importing goods through Belgium, falsely declaring another European Union country as the final destination to evade VAT, and then selling them on the black market. The content includes electronics, clothing and toys with the fraudsters levying VAT t.
“In the second case, criminals import goods via Belgium and say that they have another European country as their final destination. Then they would also have to pay VAT, usually around 20 percent, in that country of destination. But of course they don’t. The goods end up on the black market.
Often these are popular, everyday products: electronics such as earpods, toys, clothing, LED lighting, etc. The fraudulent sellers do charge their buyers VAT, but never deposit that money with a tax authority in a European country.”
