Ghost Companies, Fiction or Reality?

Abstract

In Romania the so called “ghost companies” are more ofthen accused of tax evasion. Some of the “ghost companies” do exist but others don’t really exist. The existing “ghost companies” and their shareholders are nowhere to be found and don’t have employees. Companies that buy from “ghost companies” are accused that they do “fictitious operations” and account “fictitious expenses”. Fictitious operations don’t correspond to factual or legal reality and refer to imaginary operations, which in fact don’t exist. Fictitious expenses aren’t based on real operations and aren’t based on totally or partially valid documents. “Ghost companies” are discovered applying the Law 656/2002 on money laundering, when reporting transactions higher than 15,000 EURO. Romanian and EU authorities find „ghost companies” when discovering differences between invoices accounted by suppliers and invoices accounted by buyers. Authorities should hold responsible only those who willingly are involved in tax evasion together with the “ghost companies”.

Keywords

• ghost company
• fictitious operation
• fictitious expenses
• tax evasion