Tax Authority probes €6.7M tax fraud scheme involving Bulgarian-linked DigiD accounts

The Dutch Tax Authority suspects large-scale income tax fraud involving more than 6 million euros, allegedly carried out by Bulgarians through the misuse of DigiD accounts, NOS reports.

State Secretary for Finance Eerenberg wrote in a letter to parliament that the Tax Authority identified the suspected fraud at the end of last year after noticing a sudden surge in income tax returns submitted in a uniform pattern. These returns were structured to consistently trigger tax refunds, including by reporting unusually high deductions or unverified wage-related costs.

The refunded amounts were quickly withdrawn or transferred to other bank accounts. Investigators believe these accounts were opened solely to receive the payments.

At the same time, Logius, the government agency responsible for DigiD, received reports that large groups of Bulgarians were traveling to Dutch municipalities to apply for DigiD credentials. Municipalities observed what appeared to be organized trips, with applicants accompanied by intermediaries.

Eerenberg wrote: "The applicants would not know what applying for a DigiD means or what they can do with it."

Authorities believe the individuals involved were likely paid but did not understand they were participating in organized fraud.

The suspected scheme involves at least 400 DigiD accounts. The Tax Authority has launched an investigation, halted payments linked to the accounts, and blocked multiple bank accounts connected to the case.

According to Eerenberg, the total suspected fraud amounts to 6.7 million euros. Of that, 2.3 million euros is still expected to be recoverable because it remains in blocked accounts. That leaves at least 4.4 million euros unrecoverable.

All bank accounts involved were opened at the same bank, which reported the suspicious activity to authorities. The Tax Authority is now investigating whether similar patterns exist at other banks. Officials say the total damage could still rise, as it is unclear how long the suspected fraud has been taking place.

The case also echoes earlier fraud linked to Bulgarian nationals in the Netherlands about 15 years ago, when a criminal network encouraged people to register in the country, claim benefits, and then return to Bulgaria. That “Bulgarian fraud” cost the Dutch state several million euros.

In response, authorities introduced stricter rules and a tougher enforcement approach on benefit fraud. Officials and analysts have linked that shift in policy to the emergence of the childcare benefits scandal, in which thousands of parents were wrongly ordered to repay large sums of childcare benefits.