Changtel owed millions of pounds to HMRC, after the outfit participated in transactions which related to the fraudulent evasion of VAT between 29 June 2007 and 10 December 2010.
The fraud involved batches of high-value components shipped between companies in different parts of the EU. The fraudsters charge VAT on the sale of the goods but do not pay this back to the relevant governments and then in most cases disappear or shut up shop.
Between 2007 and the close of 2010, ETL was involved in 107 wholesale transactions, 79 of which HMRC claimed were traced back to “defaulting traders”, incurring tax losses of at least £15.6 million.
A further 25 were tracked to defaulting suppliers, via a contra trader, and those defaulting traders incurred tax losses of £5.4m to HMRC.
“Tsai caused or allowed ETL to wrongfully claim input VAT of at least £19.5 million from HM Revenue and Customs in relation to the [fiscal] 2007 to [fiscal] 2010 VAT periods,” the IS document stated.
Changtel was finally wound up in 2015, but before this Changtel sold several assets to Entatech in 2013, another company with links to Tsai. These transactions were disputed by HMRC.
Entatech itself was sold to Stevinson Capital in 2015, which reached a settlement early last year. Tsai is not involved with the business since.