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|style="font-size:1.1em;"| ''Stróman'' is a Hungarian colloquial term used for a person who acts on behalf of a principal. The literal English meaning of ''stróman'' is scarecrow or hay-man. The word is widely used in Hungary; it is almost universally known. When it appears in everyday conversations, it often has a negative connotation because somebody’s ''stróman'' is regarded as an inferior servant who loyally follows his/her master’s orders. Moreover, there is also a common belief that the principal probably has an unethical or even illegal reason to use a ''stróman'' instead of acting by him/herself. Analogous practices exist in other countries. For example, the word ''strohmann'' is known and used in a similar way in Germany. ''Prestanome'' is the Italian version of ''stróman'', while in Russian the words ''podstavnoe litso'' (literally ‘dummy person’), or ''frontirovanie'' (fronting) are used. | |style="font-size:1.1em;"| ''Stróman'' is a Hungarian colloquial term used for a person who acts on behalf of a principal. The literal English meaning of ''stróman'' is scarecrow or hay-man. The word is widely used in Hungary; it is almost universally known. When it appears in everyday conversations, it often has a negative connotation because somebody’s ''stróman'' is regarded as an inferior servant who loyally follows his/her master’s orders. | ||
Moreover, there is also a common belief that the principal probably has an unethical or even illegal reason to use a ''stróman'' instead of acting by him/herself. Analogous practices exist in other countries. For example, the word ''strohmann'' is known and used in a similar way in Germany. ''Prestanome'' is the Italian version of ''stróman'', while in Russian the words ''podstavnoe litso'' (literally ‘dummy person’), or ''frontirovanie'' (fronting) are used. | |||
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[[File:Photograph of two homeless people.jpeg |400px|thumb|left Description: Photograph taken in 2006 by Gergely Túry to document a stroman case in Hungary. The two homeless people depicted in this picture are László Kutrucz and László Baráth, who were CEOs of several fake companies; this fake companies were used to procure a significant amount of public funds and served as intermediaries for the Hungarian subsidiary of Siemens. The homeless CEOs' jobs was to withdraw money from the fake companies' bank accounts in order to give it back in cash to their shadow principals. This case was explored by an investigative journalist, Annett Sipos; it was later published in the Hungarian economic maganize HVG in 2006. Both Kutrucz and Baráth agreed to be photograph and they also gave permission to use their names. The article can be found: [http://hvg.hu/itthon/20061211_siemens.]Source: Gergely Túry and David Jancsics]] | [[File:Photograph of two homeless people.jpeg |400px|thumb|left Description: Photograph taken in 2006 by Gergely Túry to document a stroman case in Hungary. The two homeless people depicted in this picture are László Kutrucz and László Baráth, who were CEOs of several fake companies; this fake companies were used to procure a significant amount of public funds and served as intermediaries for the Hungarian subsidiary of Siemens. The homeless CEOs' jobs was to withdraw money from the fake companies' bank accounts in order to give it back in cash to their shadow principals. This case was explored by an investigative journalist, Annett Sipos; it was later published in the Hungarian economic maganize HVG in 2006. Both Kutrucz and Baráth agreed to be photograph and they also gave permission to use their names. The article can be found: [http://hvg.hu/itthon/20061211_siemens.]Source: Gergely Túry and David Jancsics]] | ||
The value-added tax rate (VAT) in Hungary is 27 percent, the highest in the world. Hungarian companies routinely buy receipts from ''stróman'' companies in order to prove false costs for fictitious service and so reduce the VAT they need to pay. It is reported that ''stróman'' company schemes – chains of deliberately created and managed fake ‘receipt factories’ (''számlagyár'') – exist in Hungary, in which the final receipt giver often happens to be a foreign company in Ukraine or Serbia that cannot be investigated by the Hungarian tax authority<ref>Baka, F. Z. 2014. ‘Titkos zugok - A fordított áfa a NAV csődje?’ Figyelő.hu, 04 January, http://figyelo.hu/cikkek/titkos-zugok---a-forditott-afa-a-nav-csodje</ref>. Many receipt schemes operate relatively securely because their shadow owners have good connections to political parties, to government officers and to the tax authority. Thus they are able to ‘turn off’ external controls of anti-corruption units, judicial authorities or prosecutors<ref>Jancsics, D. and Jávor, I. 2012. ‘Corrupt Governmental Networks’, International Public Management Journal, 15: 62-99</ref>. | The value-added tax rate (VAT) in Hungary is 27 percent, the highest in the world. Hungarian companies routinely buy receipts from ''stróman'' companies in order to prove false costs for fictitious service and so reduce the VAT they need to pay. It is reported that ''stróman'' company schemes – chains of deliberately created and managed fake ‘receipt factories’ (''számlagyár'') – exist in Hungary, in which the final receipt giver often happens to be a foreign company in Ukraine or Serbia that cannot be investigated by the Hungarian tax authority<ref>Baka, F. Z. 2014. ‘Titkos zugok - A fordított áfa a NAV csődje?’ Figyelő.hu, 04 January, http://figyelo.hu/cikkek/titkos-zugok---a-forditott-afa-a-nav-csodje</ref>. Many receipt schemes operate relatively securely because their shadow owners have good connections to political parties, to government officers and to the tax authority. Thus they are able to ‘turn off’ external controls of anti-corruption units, judicial authorities or prosecutors<ref>Jancsics, D. and Jávor, I. 2012. ‘Corrupt Governmental Networks’, International Public Management Journal, 15: 62-99</ref>. | ||