Another service provider went bankrupt! Scammed sellers caused losses of over 1.5 million

Another seller has been severely ripped off.

French VAT has exploded, with some sellers finding themselves defrauded of 100,000 euros in taxes by service providers, with a total loss of up to 200,000 euros. This may involve several well-known domestic service providers, and many cross-border sellers have been defrauded, with the amount involved possibly reaching hundreds of millions of yuan.

The VAT explosion has exposed the gray chain in the cross-border industry and reflected the greed of some unscrupulous service providers in the industry. These people have swindled tens of millions of assets and are at large, but have left a large number of sellers to pay the bill.

The service provider went bankrupt, and the seller was defrauded and lost 1.55 million

Recently, the seller Li Ting revealed to Yien.com that she was defrauded of more than 100,000 euros in taxes, but the service provider shirked responsibility and ignored the matter.

Li Ting said that the fraud occurred between October 2019 and June 2020. At that time, she paid the tax to the service provider at the normal amount. Unexpectedly, this year the French tax authorities checked the tax payment in previous years and found that she had underpaid taxes (plus late payment fees) by 130,000 euros, and there was a fine of about 50,000 euros by the end of 2022.

Only then did Li Ting discover that the taxes received by the French tax authorities did not match the taxes she actually paid.

According to insiders, the seller was deceived in the following way: after paying the service provider the normal tax amount, the accountant working with the service provider modified the decimal point of the tax, causing the accounts to mismatch. For example, the seller should pay $100 in tax, but the accountant actually reported $10 in tax, which means the seller paid $10 in tax, and the remaining $90 disappeared.

This year, the French tax authorities conducted an audit and Li Ting was required to pay 130,000 euros. The actual situation was that she had already transferred the full amount to the service provider. If the money was not used to pay taxes normally, the service provider would be suspected of defrauding the seller of taxes.

Currently, Li Ting is required to pay 130,000 euros in taxes and a fine of 50,000 euros, with a book loss of about 180,000 euros (about 1.4 million yuan). According to her analysis, her fine bill for this year has not yet been issued, and she estimates that the overall loss will exceed 200,000 euros ( about 1.55 million yuan).

It is understood that the service provider that Li Ting cooperated with was *Yi. After the incident, she went to the service provider to negotiate a solution to the matter. However, she was dumbfounded by the first solution proposed by the other party.

“ The first option they gave me was to let me give up this store. I was stunned when I heard that. I have been running this store in France for a long time and the amount of money is huge. There is no way I can give up, ” said Li Ting.

Later, the service provider told Li Ting that they could give her a maximum of 100,000 to 150,000 yuan in compensation, which was far from her own losses, and Li Ting refused it.

After the discussion on the solution failed, the service provider began to shirk responsibility, saying that the problem was with the cooperating accountant and that they were also the victim. However, the tax payment link for Li Ting was clearly provided by the service provider.

It is worth noting that after Li Ting paid the tax to the service provider, the receipt she received was correct, which may involve receipt falsification.

Li Ting is currently being held liable for 180,000 euros, and the French tax authorities require her to provide payment details at the time, otherwise they will bear all the losses. She asked the service provider about this, but the service provider said that they had lost contact with the accountant involved and the account had been cancelled. This means that Li Ting cannot get the specific tax details paid by the accountant to the bank, and she is currently preparing materials to sue the service provider.

An accountant can easily swallow up nine-tenths of the tax by modifying a decimal point. The temptation of this operation is too great! But does an accountant have such a great ability?

According to industry insiders, the accountant involved had previously gone bankrupt. The accountant had cooperated with many domestic tax agency service providers, including several large service providers that the sellers were familiar with. These service providers also stopped cooperating with the accountant about two years ago.

Coincidentally, another seller in the industry was also a victim of the French VAT explosion like Li Ting . A tax agency service provider that he cooperated with also exploded. After withholding taxes , the service provider did not hand it over to the French tax authorities . The seller discovered this about two months ago and the incident is still being handled.

If we calculate carefully, there should be quite a few sellers affected by this incident, and the amount of fraud involved is not small.

"Just one seller was defrauded of 100,000 euros by a problematic accountant between October 2019 and June 2020. Judging from the service providers that this accountant cooperated with, there must be many sellers who were defrauded, and the amount involved may be as high as hundreds of millions of yuan, " the above-mentioned person familiar with the matter analyzed.

Tax agency black and gray industries exposed, a large number of Chinese sellers may be deceived

This incident involved several well-known tax service providers and also exposed the black and gray industry chain of tax agents.

It is reported that sellers in the industry generally contact tax agency service providers (we call them first tax agencies) directly to pay taxes on their behalf. The first tax agency will transfer the tax payment to French accountants, and the accountants and tax agencies have a cooperative relationship. There are also first tax agencies that will find other service providers (we call them second tax agencies), and then contact accountants through the second tax agencies. There are multiple intermediaries here, just like cross-border logistics, after the freight forwarder receives the goods, they will be shipped through another freight forwarder channel.

After something goes wrong, the seller will directly find the first tax agent, and the tax agent will give feedback that there was a problem with the accountant or the cooperative tax agent. Are there any problems with the first tax agent and the second tax agent service provider?

Adam, an industry insider , said that if there was no problem with the tax agent, he would file a case with the seller. For example, if there was no problem with the service provider that Li Ting worked with, they would contact the accountant with the seller to handle the matter after the incident. At present, this service provider shirked responsibility and did not solve the problem, which shows that it has ulterior motives.

It is understood that after paying the tax, the seller will receive a receipt (which may be a fake receipt) with the tax bureau where the tax was paid on it. After the seller reports the case to the police, the police will contact the local tax bureau. If the tax bureau checks the account of the accountant to which the accident occurred to have paid taxes, this may bring up many similar cases, and the case may be very big.

As a service provider who pays taxes for sellers, sellers first transfer money to their accounts, so it is common for service providers to have millions of euros in liquid funds in their accounts. It is difficult for some people not to be tempted by this money, which is a common phenomenon in the industry. It is also worth noting that not only France needs to pay taxes, but also Spain, Italy and other countries.

If there are problems with the sellers' tax payment channels in other countries, this will involve more people, and perhaps this matter will become a behind-the-scenes operation in the entire industry, which defrauds the taxes of many Chinese sellers.

Just imagine that a service provider or accountant can easily make a lot of profit by just making a few adjustments. Even if they know that this operation is against the rules, some people will still do it.

Another factor that drives tax agencies to tamper with their accounts is the non-compliant practices of cross-border sellers. In order to pay less tax, some sellers team up with tax agencies to tamper with their accounts. Each of them pays less, and the tax agencies profit from it. When tax agencies earn high profits from tax-evading sellers, they will also have ulterior motives when faced with sellers who file tax returns normally.

However, this type of operation is unlikely to happen after Amazon withholds European taxes. After the platform withholds directly, no large amount of money is paid to the service provider’s account. This tax fraud against Chinese sellers also occurred before withholding, so sellers who have paid taxes in France or other European countries before can check their company’s tax payment amount to see if the backend is consistent with the receipt given to you by the service provider.

How should sellers check themselves? 1. Find the current tax agent and check the French tax agent's backend to see if it is consistent with their actual payment; 2. If the tax agent does not cooperate, then there may be a problem with the tax agent; 3. Go to another new tax agent to check.

In Adam's opinion, cross-border sellers should conduct self-inspections from all angles. If nothing goes wrong, that's the best. If there is something wrong, they should actively defend their rights to recover the losses and call the anti-fraud center to get their money back.

(Li Ting and Adam are pseudonyms in this article )

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