23 Apr Case studies of tax crimes in the EU
Case studies provide excellent insight into the daily work of police, tax authorities, prosecutors and judges in action and allows researchers to analyse how experts engage in working on a case within and across institutional boundaries. It also has the potential to highlight challenges such as constraints of time, lack of information and communication, human and other resources.
Ten organisations, including law enforcement agencies (LEA) and researchers alike, have developed 16 cases studies assessing cases in twelve countries, namely Austria, Estonia, France, Germany, Ireland, Italy, Malta, Portugal, Spain, the United Kingdom, Luxembourg and Switzerland.
The aim of the present report is to create a synthesis of the principal findings from these case studies and to collect further feedback and views from experts on them.
These case studies look upon VAT-carousels, VAT-fraud, shell companies, trusts, different forms of fraud and profit shifting in different sectors and areas of the economy.
Most of the cases involve tax havens and nearly all of them had professional enablers to assist the crimes therein. Tax evasion cases are included in various critical and enabling sectors, some of these cases were initiated by whistle-blowers. A special focus has been given to the area of inter-agency and transnational cooperation and its potential complexity and diversity and we have also considered cooperation and organisational structures and analysed jurisdictions and law enforcement agency (LEA) frameworks.
Shortly after starting the investigation, we also found a very interesting phenomenon called “bias of the role of the financial authority and pre-trial guilty pleas” for which we also devoted some space in our report, as well as the legal frameworks for corporate liability.
- One major challenge in combating tax crime is developing effective transnational cooperation in fighting tax crimes. Currently, this is hindered by incompatible institutional responsibilities and legal frameworks, the lack of trust-based working relations, as well as communication and language problems between authorities.
- Another main challenge in the fight against tax crimes is the diversity and complexity of methods used by criminals in contrast to the low resources that law enforcement bodies possess to investigate these crimes, including financial and human resources, but also the cooperation with other jurisdictions.
- There is a need to define a clearer role and legal responsibility of professional enablers due to their dual role.
- Tax evasion is criminalised in different criminal codes and legal tools in the EU Member States, yet there is not a universal or a common EU definition that can be applied in research on tax crimes.
- Tax authorities often lack access to specific types of expertise or tools for forensic analysis needed for complex fraudulent schemes, which becomes particularly crucial when under-staffed prosecution is confronted with several lawyers from top-end law firms in court.
Please note that the law cited were valid and correct at the time of the reports publication.