24 Apr Report on conviction rates in selected Member States
This report investigates why some EU Member States are more successful than others in obtaining convictions for tax crimes by looking at crime statistics, and analysing the role played by different domestic legal frameworks, and information-sharing methods.
It identifies the main issues that can negatively impact the fight against tax evasion through criminal law and makes suggestions to improve the current situation at national and EU levels.
Considering that crime statistics are indicators that can better support public authorities’ decision-making in criminal tax matters, they can be used to assess the enforcement of the national and EU rules against criminal tax offences.
Moreover, they can also increase public awareness about tax fraud and can be used to react rapidly to the harm associated with the tax crimes facilitating, for instance, whistleblowers against corrupt practices and citizens to report cases of tax fraud.
This research looked at a representative sample of ten European countries (Austria, Czech Republic, Estonia, Finland, Germany, Ireland, Italy, Malta, Portugal, and the United Kingdom). Several factors have been considered during the selection process, including fair geographical distribution of these countries, the scale of tax evasion, the legal and operational factors impacting the fight against tax offences, and the ways adopted in collecting, analysing and publishing crime statistics.
This research faced various challenges, for instance, collecting reliable and detailed statistics or finding an explanation of the collected figures since the factors that can impact on the enforcement of criminal rules could be manifold (e.g., size of the tax evasion, level of the rule of law, legal frameworks aimed at preventing and fighting tax crimes etc.). It is also difficult to compare statistics on tax crimes considering the different approaches adopted by the Member States to collect and analyse them. To address these challenges, this study recommends that all Member States shall adopt and publish comprehensive illustrative statistics on the effectiveness and efficiency of their anti-tax evasion systems that can be easily accessible by citizens and other EU countries. Moreover, an analysis of criminal data should be carried out considering both statistical data and legal observations to ensure that the results are reliable.
Key Findings
- Answering (based on statistics available at present) why certain countries are more successful than others in investigating, prosecuting and convicting tax crime is hindered by the fact that the EU Member States have not yet developed common methods for collecting and analysing data.
- There is often a lack of coordination and/or standardisation within the national tax eco-systems and also among the EU Member States hindering the homogeneous collection of statistical data, therefore comprehensive and targeted analysis of information on tax prosecutions and convictions statistical analysis needs to be combined with a legal analysis so that certain variables that are essential for meaningful assessment are not overlooked.
- There is a need to develop a common approach to statistics on tax crimes within the EU Member States whereby they should maintain and publish comprehensive and consistent statistics on matters required to assess the efficacy, effectiveness and efficiency of their anti-tax fraud systems.
- Current statistics show differences between the law in the books and in action within the EU Member States (for instance, the criminalisation of tax evasion does not necessarily mean that a State effectively punishes tax offenders, considering that certain countries have a lack or low level of criminal investigations)
- Many factors can impact the numbers of investigations, prosecutions and convictions of tax crimes within the EU Member States, including, for instance, political-institutional approaches to tax crimes, national legal frameworks about tax collection and law enforcement, techniques and methods for discovering and investigating tax crimes, general principles and legal regimes governing investigations and prosecutions, typology of inter-agency cooperation and international cooperation in criminal matters.
- Cooperation between the various agencies and international cooperation for information-sharing has a significant impact on the fight against tax offences in particular in the case of transnational tax and financial crime.
- An opportunity to launch a common approach in the analysis of tax crimes comes from Article 18 of the Directive (EU) 2017/1371 on the fight against fraud to the Union’s financial interests by means of criminal law, that foresees the need to collect and analyse crime statistics about fraud affecting EU’s revenues.
Please note that the law cited were valid and correct at the time of the reports publication.