Latvian construction firm evades taxes through fictitious employee rental via Polish companies
The Tax and Customs Police has uncovered that a Latvian construction company evaded large amounts of labor taxes by using companies registered in Poland. Employees believed they were employed by a Polish firm paying taxes, but in reality no taxes were paid in either country.
During a criminal investigation into a Latvian construction company, the State Revenue Service's Tax and Customs Police discovered a scheme to evade labor taxes. The company used entities registered in Poland to formally employ workers who were actually working in Latvia. The employees were led to believe they were legally employed by a Polish company that paid taxes on their behalf. However, the investigation revealed that no labor taxes were paid in either Poland or Latvia.
The tax debt is substantial, as the evasion occurred over a significant period. The police are continuing the investigation to determine if other individuals or companies are involved. Such schemes, where workers are fictitiously rented from foreign companies to avoid social security and income taxes, are common in the construction sector.
The Tax and Customs Police warns workers to check whether their taxes are being paid legally, as otherwise they risk losing social benefits such as pensions and sick pay. This case highlights the authorities' efforts to combat shadow economy and cross-border tax evasion.
