Thanh Hóa Police review confiscated items from the case. — Photo conganthanhhoa.gov.vn

THANH HÓA — Police in the central province of Thanh Hóa announced that have summoned 30 individuals for an investigation into tax evasion carried out through the use of point-of-sale (POS) terminals registered under small business entities.

During questioning, the suspects, who are from Thanh Hóa and Hà Nội, said they had carried out transactions worth nearly VNĐ15 trillion (US$580 million) in total, generating nearly VNĐ100 billion in revenue and evading tens of billions of đồng in taxes.

The police seized nearly 400 POS terminals, 10,000 credit cards, 95 mobile phones, 20 computers and various documents.

Previously, the economic security division of Thanh Hóa Provincial Police discovered that several individuals in the area were using POS terminals to provide services for credit card balance settlements and cash withdrawals.

These operations involved large transaction volumes, yet the individuals involved had neither registered as businesses nor fulfilled their tax obligations.

Initial investigations showed that the suspects used credentials of small business entities to open bank accounts and either rented, borrowed or partnered with payment intermediary services to obtain POS terminals.

The group then advertised their cash withdrawal and credit card settlement services on social media, charging fees from 1.5 per cent to 2 per cent per transaction.

When a customer sought to withdraw cash, they would process credit cards through a POS terminal, disguising the transaction as a payment for the purchase of goods or services while there was no actual sales.

That way, they would receive money electronically into bank accounts that they control.

They then gave cash, which was available in their cash register or from other funds, to the customer after deducting the fee.

Point-of-sale (POS) terminals that were confiscated by the police.

For credit card balance settlement services, the group would deposit funds into the customer's credit account to cover their outstanding credit balance, then immediately process the card through a POS terminal to recover the funds.

To expand their operations, the suspects rented additional POS terminals, hired staff to process transactions and sought out clients through social media and personal connections.

Under Việt Nam's banking regulations, withdrawing cash from credit cards via POS terminals is not legally recognised. Such transactions are considered fictitious as POS terminals are designed solely for payments for goods and services, not for cash withdrawals.

Instances where a business facilitates a credit card transaction and subsequently provides cash to someone constitute a misuse of the payment system, which carries significant risks.

The case is under further investigation. — VNS