FRANKFURT, April 24 (Reuters) - Frankfurt prosecutors on Thursday said they were investigating a German company and its chief executive on suspicion of evading payment of taxes in carousel trading of copper cathodes.
The prosecutors’ office said that the 59-year-old executive of a public limited company, based in the Bergstrasse region south of Frankfurt, was suspected of evading value-added tax totalling 6.2 million euros ($8.6 million) between 2011 and 2013.
Business and residential premises have been searched as part of the investigation, it said. As is customary in German legal cases, it did not name the executive or the company.
Carousel trading involves a buyer importing into one European Union member state from another goods free of value-added tax (VAT).
The buyer then does not sell it in the given home market but onwards to an untraceable series of firms in an agreed chain, which ultimately exports it again, pocketing a rebate from tax authorities.
This latest fraud case is minor compared to similar cases involving carbon emission trading schemes that helped evade an estimated 800 million euros of tax payments, senior public prosecutor Alexander Badle told Reuters on Thursday.
Nevertheless, it underlines that carousel trading took place in more than one industry.
$1 = 0.7231 Euros Reporting by Kirsti Knolle and Sabine Wollrab; editing by Keiron Henderson