Hungary's investigation of Scientology results in indictments of 11 for tax fraud

[Breaking news today after a six-year investigation that we first wrote about in 2017. Our man in Hungary, Péter Bonyai, updates us on the latest.]

As part of a 2017 police raid, the National Tax and Customs Administration (i.e. the Hungarian IRS) seized a large amount of documents as part of an investigation into Scientology.

Scientology is registered in Hungary as a religious association and chose not to adopt Value-Added Tax – this means they do not charge VAT (i.e. sales tax) but they can’t reclaim it either. The problem is, if you are providing business services and you are engaged in commercial operations, you can only do that if your annual income is a maximum of $34,000 USD. Scientology in Hungary claims that all they do is for the public benefit, that they are selling religious services and artifacts, so therefore this does not apply to them.

The Hungarian tax office launched an extensive investigation, looked into their books, interviewed suspects and witnesses etc., and determined that Scientology operations were commercial in nature. They calculated a sum of $1.7 million USD in tax debt, which is basically the sum of all the VAT they did not charge for the Purif, courses, auditing, books, E-meters, etc., for the fiscal years between 2012 and 2017.

Eleven executives and treasury personnel of the Church of Scientology Budapest have now been charged with $1.7 million USD tax evasion (VAT fraud) committed in a criminal conspiracy. The prosecutor is asking for actual prison time to be served and appropriate fines.

According to the investigation, the Scientologists fraudulently and knowingly reported fees paid as part of business transactions (training courses, purification programs, books, CDs etc.) as tax-free charitable donations in order to avoid taxes.

So, the tax authority considers this a knowingly committed tax fraud, executed by the defendants as a part of a criminal conspiracy.

There is no statement from the church yet, but the apologist journal Bitter Winter, perhaps anticipating today’s news, in October criticized the Hungarian government for investigating the Scientologists.

“Tax laws were weaponized to discriminate against religious and spiritual minorities and violate internationally recognized FoRB (freedom of religion or belief) principles,” the journal complained.

We will see how it develops. There will be a trial, appeals, Supreme Court petition etc. So it will take a few years to see the end results.

— Péter Bonyai

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Hey, Bay Area friends, don’t miss your chance to see Geoff and Robbie Levin’s documentary Brothers Broken while it’s still playing the festival circuit.

Tonight it’s being featured at the Another Hole in the Head festival and will be playing at 7 pm at the 4 Star Theater on Clement St.

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Valerie Haney: The video interview

In October, we lucked out and witnessed Valerie Haney giving sworn legal statements to her attorneys about the three days she had to endure Scientology “religious arbitration” in Commerce, California.

After the third day was completed and her attorneys had left, Valerie then sat down with us and gave the Underground Bunker an interview that we’re going to share with our subscribers today at noon Eastern.

It’s our way of thanking those folks who are supporting us and helping us keep this place going.

Valerie had just come through a grueling ordeal, but she was as upbeat as ever. Her bravery and stamina continue to amaze us, and we hope you find the interview fascinating.

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Source Code: Actual things founder L. Ron Hubbard said on this date in history

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