Lessons from the case of a "ghost" company in Hung Nguyen selling fake invoices causing a tax loss of more than 5 billion VND

(Baonghean) -On May 26, 2012, Nghe An Newspaper published an article titled “The pain of red invoice trading” reflecting on the fact that Anh Tuan Trading Services Co., Ltd. in Hung Nguyen took advantage of loopholes in the law to trade invoices for many businesses, causing tax losses of billions of dong. Up to now, the Hung Nguyen District Police Department has initiated criminal proceedings and expanded the investigation. The results showed that this company sold to 118 businesses with a total VAT amount of 5.2 billion dong.



Consumers who do not get a receipt when buying goods are causing tax losses to the budget.

More than 100 companies in 4 provinces participated in buying invoices to "legalize" costs.

The brief incident is as follows: From 2010 to 2011, Nguyen Huu Tai - Director of Anh Tuan Trading Services Co., Ltd. (Block 13, Hung Nguyen Town - Nghe An) and Tran Thi Hien (company accountant) colluded to write VAT invoices of Anh Tuan Trading Services Co., Ltd. and sell them to other companies in need of invoices to "legitimize" tax evasion costs. From its establishment until its escape (August 8, 2011), Anh Tuan Trading Services Co., Ltd. did not trade in any goods or services but falsely declared input invoices to sell 532 invoices to 118 businesses and companies across the provinces: Nghe An, Ha Tinh, Thanh Hoa and Hanoi City with a VAT amount of VND 5,226,164,332 so that these businesses could declare input tax deductions.

Hung Nguyen District Police have conducted an investigation and found that many businesses bought "ghost" invoices from Anh Tuan Trading and Service Company Limited. These include: Central Region Design and Construction Branch, Vinh Quang Trading and Construction Joint Stock Company (Vinh City) bought 1 invoice worth 72 million VND, Tran Quang Company Limited (Ben Thuy - Vinh City) bought 5 invoices with a total tax amount of 36.1 billion VND, Hoang Nguyen Company Limited (Hung Binh - Vinh City) bought 2 invoices worth more than 44 million VND, Rural Infrastructure Construction Joint Stock Company (Vinh City) bought 2 invoices worth 113.8 million VND), Hoang Anh Service Company Limited (Vinh City) bought 8 invoices worth 117 million VND, Ngu Hai Construction Investment Joint Stock Company (Nghi Loc) bought 7 invoices worth 14.3 million VND...

Many large companies such as Thanh Nghe Tinh Food Company, GT 419 Construction Joint Stock Company, Nghe An Petroleum, Naconex Joint Stock Company, Nghe An Road Construction and Design Joint Stock Company... also have invoices from Anh Tuan Trading and Service Company Limited. In Nghi Loc, there are 11 enterprises, Cua Lo has 6 enterprises, Vinh City has nearly 50 enterprises... Not only in Nghe An, but also in many other provinces such as Ha Tinh, Thanh Hoa, there are enterprises that buy "ghost" invoices from Anh Tuan Trading and Service Company Limited to legitimize expenses.

This shows that the need for invoices to justify input and output costs of businesses is quite large, especially for items such as soil, stone, sand and gravel... without invoices and when there is "supply", businesses that do business but do not have invoices immediately have a need. Not only the "Director" of Anh Tuan Trading Service Co., Ltd. but also a network of drivers and accountants who "know where" to sell fake invoices. As the representative of Rural Infrastructure Construction Joint Stock Company said: In 2010, the Company undertook construction of 4 projects in Hung Nguyen, Yen Thanh, Thanh Chuong, Dien Chau. To have construction materials, the company had a driver named Nguyen Ich Duong (from Thanh Chuong, specific address unknown) provide materials and required Mr. Duong to have VAT invoices for payment. After supplying sand and stone for construction, Mr. Duong brought back to the company 2 VAT invoices from Anh Tuan Trading Service Company Limited... In Nghe An, representatives of 93 businesses said that the invoices were brought back by drivers and individuals supplying materials.

On December 29, 2012, the Investigation Police of Hung Nguyen District Police sent an Official Dispatch to the Nghe An Tax Department, the Tax Branches of Vinh City, Dien Chau, Cua Lo, Nghi Loc, Yen Thanh... regarding coordination in collecting VAT. Affirming that the act of using illegal VAT invoices by Anh Tuan Trading Service Co., Ltd. is a violation of tax laws. Requesting the Nghe An Tax Department to direct the professional departments and branches to continue to collect taxes and handle 100 businesses that purchased fake invoices. The Nghe An Tax Department also sent an Official Dispatch to the departments and branches to collect taxes from the units that purchased invoices from Anh Tuan Trading Service Co., Ltd.

More checks needed at businesses:

Not only Anh Tuan Trading Service Co., Ltd. but also in Cua Lo, Nguyen Phuong Thao (born in 1978), accountant of Cua Lo Gas Station under Nghe An Gas Company, also sold more than 3,000 invoices with false values ​​many times higher than the purchase price of gasoline to 68 transport enterprises nationwide with the amount of more than 70 billion VND, causing a loss of 7 billion VND in VAT to the budget. The Police Department of Investigation of Economic Management Order and Position PC 46 has just prosecuted the defendant Nguyen Phuong Thao.

Talking to us about the problem of fake invoices, Mr. Dau Dinh Cam - Deputy Head of the Tax Department of Hung Nguyen District said: Enterprises can use self-printed invoices most comfortably. Therefore, it is necessary to check the declaration and check the enterprise's warehouse when there are unusual signs. We discovered that Anh Tuan Trading Service Co., Ltd. had just started operating but had already started bustling trading activities. When we went down to check, the director had already fled. Therefore, we promptly sent an Official Dispatch requesting the Police to investigate.

Mr. Nguyen Van Minh - Head of the Inspection Department of Nghe An Tax Department also said: The Tax Department will further promote the verification of invoices. Check which business lines the enterprise registered for and which invoices it issued, check the import and export of invoices of the unit. In addition, check the selling price for consumers compared to the actual invoice, then check the payment of goods of the unit, check the number of invoices used, the number of invoices remaining.

Currently, the management of invoices in production and business activities still has loopholes that cause loss of revenue to the budget. Business people can easily ask for invoices to legalize expenses without the tax authorities being able to do anything. A series of stores, shops, and many items when sold do not issue invoices to customers even though the law stipulates that invoices must be issued for items from 200,000 VND or more. Most of the purchases of gasoline, medicine, clothes, chairs, etc. do not have invoices. Consumers not taking invoices also create conditions for businesses to easily evade taxes from the State.

Chau Lan