Thursday, August 26, 2010

Finns use Estonia for tax evasion

Investigators in Finland have uncovered extensive abuse by directors and owners of companies registered in Estonia. Research has revealed around 16,000 holders of Finnish social security cards with positions of responsibility in Estonian registered companies, many of which evade taxes and other statutory payments.

According to this article, Estonian companies can be registered over the internet, with no obligation to visit Tallinn or demonstrate any physical presence in the country. Unsurprisingly, using Estonian registered companies has become popular in the construction sector, which is prone to tax fraud because Estonian firms are not liable to pay Finnish tax or social security on projects lasting less than six months.


Blogger Physiocrat said...

I thought both Finland and Estonia had LVT. They just need to knock it into better shape and ramp up the amount they collect, steeply.

When I was there in 2006, Tallinn still had masses of empty buildings and vacant sites in and around the city centre, and there was a property boom going on.

Finland presumably has LVT or something like it as you don't see vacant sites around.

A hefty dose of LVT, accompanied by equally heft cuts in the taxes that are being dodged through these fiddles, sounds overdue.

Neighbouring Latvia needs to do the same thing - there are vacant sites and derelict buildings all over the centre of Riga. The smell of land speculation is in the air. I was not impressed with the country.

1:41 am  

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