Underinvoicing

Underinvoicing

The act or practice of stating the price of a good on an invoice as being less than the price actually paid. Underinvoicing occurs if the importer and/or exporter wish to reduce a tariff or if a buyer and/or seller wish to reduce their apparent profits so as to pay less in taxes. See also: Fraud.
References in periodicals archive ?
It begins with black money generation-- a company could either indulge in ' master roll fudging', wherein wages and employment figures are inflated like in the case of the erstwhile IT poster boy Satyam, where 13,000 fictitious employees were created or through underinvoicing.
Audit held that it was case of underinvoicing by the importer to evade duty and taxes which could not have been made possible without connivance with customs authorities.
1997) Determinants of Underinvoicing of Imports in Pakistan.
The underinvoicing of imports and exports by Dominican businesses is a relatively common practice for those seeking to avoid taxes and customs fees.
This may be accomplished through acquiring loans, making salary payments, paying consulting fees, the use of false import/export invoices, overinvoicing and underinvoicing, real estate investment and investment in the securities markets.
I suspected underinvoicing of sales out of Kenya, and overinvoicing of expenses charged to Kenya, which both reduce taxable profit in Kenya.
By comparing the extent of misreporting on quantities versus values, we were further able to determine whether evasion occurred through underinvoicing quantities, prices, or relabeling high tariff goods as low tariff ones.
The objective of customs reforms is to discourage misdeclaration, underinvoicing and smuggling, which causes loss of billions of rupees to the country.
Consequently, both importers and exporters involve in over- and underinvoicing of imports and exports, respectively, and sell the unreported forex in the UMs to earn UM premiums.
APBI strongly suspects that certain practices of import-document manipulation have been conducted, especially underinvoicing and undervolume, given that Chinese tyres entered Indonesia through large ports.
An example of round tripping would be an oil company underinvoicing its exports to evade taxes, and then creating a foreign shell company to invest in GKOs as a nonresident.