New method of tax fraud gains strength in Slovakia

Slovakia is quickly becoming home to a popular type of tax fraud, whereby a heavily indebted company which has profited without paying its share of tax is able to wash itself of the problem by merging with another company. The new combined company however is often registered as being owned by someone with no assets, such as a homeless person or someone in a distant country such as Thailand. More than a decade ago the Finance Ministry registered approximately two hundred companies which disappeared via mergers, however in 2015 there were more than 3200 instances recorded. Tax consultant Alica Orda Oravcová stated to the Hospodárske Noviny daily that this new, rapidly growing method of tax fraud came about through 2013 amendments to tax legislation which made it harder for fraudsters, leaving the merger method as their only loophole. The press department at the Finance Ministry announced that it is working on closing this loophole with changes to the Commercial Code, with the help of the Justice Department.