Evasion of income tax of legal entities directly affects the government’s ability to fund resources. It arises out of not granting taxable income, or an increase in expenses and overstatement of tax, respectively costs.
Tax fraud and evasion in respect of VAT most often comes from fraud and evasion in cross-border transactions, fraud and evasion related to invoicing and accounting or from avoiding of VAT registration and payment.
Consumption tax evasion occurs most frequently in tobacco and alcohol industry. Counterfeiting labeling of these products results not only in the state budget shortfalls, but potentially disastrous consequences for human life and health.