Restaurant owners charged over nearly 100,000 euros in undeclared wages

Two people linked to a restaurant company in Lappeenranta are accused of arranging nearly 100,000 euros in undeclared wage payments, Yle reports. The payments were recorded in the company’s accounts as mileage reimbursements and daily allowances.

One defendant owns Kolme Kiveä Ravintolat, a company that has operated several restaurants in Lappeenranta. The other worked in a managerial position at the company. Prosecutors are seeking convictions for aggravated tax fraud.

The defendants told the South Karelia District Court that they had agreed on a five-year arrangement lasting from 2018 to 2022. They admitted reporting mileage reimbursements and daily allowances to the Tax Administration even though the journeys and trips had not actually taken place.

The employee who received the mileage reimbursements did not have a driving licence.

According to the Tax Administration, about 60,000 euros in taxes were avoided in connection with the employee. The restaurant company also paid too little tax because of false information provided for tax withholding.

The prosecutor said the offence should be considered aggravated because of the intended financial benefit, the agreed arrangement and the length of time it continued.

The prosecutor is seeking a 10-month prison sentence for the restaurant entrepreneur and a seven-month sentence for the employee. Both sentences could be suspended. The demands were reduced because both defendants admitted to the wage arrangement before the trial.

The court is also considering compensation claims and how liability for the payments should be divided between the parties.

The South Karelia District Court is expected to issue its ruling later this month.

Kolme Kiveä Ravintolat has since ceased operations through bankruptcy. Two other restaurants in Lappeenranta connected to the case have changed ownership.