São Paulo Executes 'Exaustão' Raids in Auto-Parts Tax Fraud Probe

Overview

• Ten search-and-seizure warrants were carried out on December 10 in Campinas, Limeira, Ribeirão Preto, Sorocaba, São José dos Campos and São Paulo.
• Fifty state tax auditors worked with the Department for the Protection of Citizenship (DPPC) and regional police units (Deinters) to gather evidence.
• The investigation targets manufacturers and distributors across the exhaust-system chain under the substitution tax regime, with indications of manipulated declared values to cut taxes.
• Officials say the practices continued despite earlier fiscal actions that already resulted in more than R$257.9 million registered in Dívida Ativa.
• Investigators report signs of front companies and common controllers, and they are examining possible money laundering and asset concealment, with no arrests or charges detailed in reports.