Spain Uncovers €300M VAT Fraud in Hydrocarbon Sector

The Spanish Tax Agency announced that it has uncovered and dismantled a massive EUR 300 million VAT fraud in the hydrocarbon sector, which included more than 38 companies. As reported by the Tax Agency, this VAT scheme is one of the two largest uncovered in the hydrocarbon sector to date in Spain. In addition to dismantling a VAT fraud network operating throughout Spain, authorities made arrests and seized properties, vehicles, boats, bank accounts, cryptocurrencies, cash, luxury goods, and precious metals.

Course of VAT Fraud Investigation

The Spanish Tax Authority reported that the investigation called “Pamplinas Stars,” which involved more than 160 officials, began in mid-2024, when it started analyzing possible fraud by a wholesale operator who began selling large quantities of hydrocarbons at the end of 2023. 

Before the regulatory change in January 2025, which introduced stricter compliance obligations, the rules did not require companies in the Register of Hydrocarbon Extractors (Register) to submit monthly declarations and report through the SII system. Instead, operators were only obliged to submit quarterly VAT declarations and provide annual identification of clients and suppliers. 

The first operator in this network allegedly exploited this framework by reporting VAT amounts significantly lower than actual sales while claiming higher VAT paid than warranted. However, the investigators determined that the operator conducted this scheme through shell companies that formally invoiced the final buyers for the extracted products, thereby concealing the true scale of transactions. 

Once this operator was removed from the Register in mid-2024, the whole fraudulent operation shifted to a second operator, which began selling large quantities of hydrocarbons in October 2024 and was removed from the register within a month. Investigators estimate that this operator defrauded EUR 123 million between October and November 2024.

In December 2024, a third operator started similar fraudulent activities, selling hydrocarbons within a fiscal deposit before taxes were due, but it was removed from the Register just five days later. Notably, all three operators were banned from acting as hydrocarbon wholesalers and were expelled from the market. At the same time, investigations continue under the coordination of the Anti-Corruption Prosecutor’s Office and the National Courts' Instructions.

The Tax Authority conducted 18 raids across multiple locations in Spain, seized vehicles worth around EUR 3 million, two recreational boats valued at over EUR 63,000, and 48 properties totaling EUR 10.8 million. Furthemore, hundreds of bank accounts were frozen, holding more than EUR 6 million, together with crypto assets, goods valued over EUR 440,000 were confiscated, and more than EUR 314,000 in cash was recovered.

Conclusion

The final result of the investigation is a discovery of a large and complex network of companies created to both defraud VAT and transfer the illicitly obtained funds abroad to avoid detection. The organization, supported by front men and complicit legal advisors, used part of these funds to acquire additional companies listed in the Register, enabling the continuation of the fraud.

Source: Spanish Tax Agency, VATabout