BEIJING - Beijing police have busted a tax fraud case involving more than three billion yuan ($460 million) and 1,500 firms across 29 provinces and cities.

A police officer from Haidian district said that 20 suspects in the gang were caught during a joint operation by tax and police departments in November last year.

Last October, Haidian police received a report from the state tax department that a trade company was suspected of purchasing and selling VAT invoices worth around 200 million yuan each month. Tax officials then discovered many similar firms in Beijing.

Police found the gang established shelf companies with no business activities, cheated the invoices from tax bureau, and made profits by selling them to firms which wanted to inflate their VAT invoices to get increased tax rebates.

The case has caused losses of more than 500 million yuan in tax revenues.