Bulgaria Luxury Cars Registered as Fast Food Trucks to Evade VAT

Luxury car owners managed to evade VAT by registering their vehicles as trucks. Photo by EPA/BGNES

Bulgaria's police authorities have discovered a total of 157 luxury cars that were registered as vans or pickup trucks in order to avoid the payment of sizable value-added tax.

This has been the result so far of a thorough inspection ordered by the Interior Minister, Tsvetan Tsvetanov, on August 20. The police have already started legal procedures against 30 owners of such cars.

In one of those cases, the authorities have already managed to collect for the state budget the evaded VAT that amounted to BGN 44 459 together with the interest, the Interior Ministry press service announced.

The scheme works as luxury expensive vehicles such as BMW X 5, BMW X 6, Porsche Cayenne, Audi Q 7, Mercedes ML, Mercedes GL, etc, are registered as trucks.

To achieve this, the owners just remove the back seats, and have a special firm install a light screen behind the driver seats. Thus, the car receives a protocol for the modification that it has been turned into a light truck, and trucks in Bulgaria are free of VAT.

In this way, the owners of the luxury cars save or receive back from the state between BGN 15 000 and BGN 45 000 that they would have paid as a VAT. Once they achieve that, they quickly turn their cars back into luxury vehicles.

Meanwhile, in the city of Plovdiv, the police found 26 luxury cars registered as light trucks for distributing banitsas (traditional Bulgarian dish turned fast food); according to the documentation, each of those cars is worth BGN 1 000-2 000. The actual value of the cars in question is between BGN 100 000 and 160 000, and the cases are currently investigated.

One other matter of investigation is whether luxury vehicles turned trucks, and turned luxury cars again were driven with vignettes for cars, or for trucks. The annual vignette for a car in Bulgaria costs BGN 67, whereas the annual vignette for a truck is BGN 550.

The Interior Ministry has announced that the inspections on the whole territory of Bulgaria are going to continue until all luxury cars are discovered and registered, and until the origin of the funds that the owners used to purchase them is established.

 

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