Study on tax fraud: response form for national authorities

The information that you provide in this form will help us understand the institutions in your country with responsibilities relevant to the study on tax fraud that we are conducting for DG Taxation and Customs Union.

This will help us contact the right person when we have a specific query or wish to consult on particular aspects of our work.

We also welcome comments and additions related to our developing bibliography and working paper (15 pages, PDF) on approach and data sources.

For more information see the study website: http://www.reckon.co.uk/taxfraud.

This response form is also available for download as a Microsoft Word document (66k).

You can respond in any of the following ways:

We would appreciate a response by Monday 19 March 2007 if at all possible. We are happy to receive partial responses, and additional information after the deadline.

It would be easiest for us if responses were in English, French, Italian, Portuguese or Spanish. But we would prefer to have your response in your own language than have no response at all. This online form accepts accented and non-latin characters.

National institutional structure and contacts

Q1. Please provide details of national agencies, departments or institutions responsible for collecting VAT. Please provide the name and details of a specific contact person if possible.

Q2. Please provide details of national agencies, departments or institutions responsible for collecting excise duties on alcohol, road fuel and tobacco. Please provide the name and details of a specific contact person if possible.

Q3. Please provide details of national agencies, departments or institutions responsible for collecting corporate tax. Please provide the name and details of a specific contact person if possible.

Q4. Please provide details of national agencies, departments or institutions responsible for the audit of tax revenues. Please provide the name and details of a specific contact person if possible.

Q5. Please provide details of national agencies, departments or institutions responsible for collecting national statistical information on consumption and/or trade and for compiling the national accounts.

Q6. Please provide details of any administrative units in tax collection agencies, treasury and/or audit organisations with specific responsibilities for estimating or preventing tax evasion. Please provide the name and details of a specific contact person if possible.

Q7. Please provide details of any administrative units in tax collection agencies, treasury and/or audit organisations with specific responsibilities for forecasting tax revenues. Please provide the name and details of a specific contact person if possible.

Q8. Please provide details of any administrative units in tax collection agencies, treasury and/or audit organisations with specific responsibilities for calculating the weighted average rate used in determining the VAT own resource under Council Regulation 1553/89. Please provide the name and details of a specific contact person if possible.

Q9. Please provide any other relevant information or comments on the national institutional structure.

Existing studies of tax losses

Q10. We have placed on the study website a list of annotated links to existing studies that we are aware of. Are you aware of any other work to calculate tax losses for VAT, excise or corporate income taxes? Please provide details and references for any published material.

Data sources for estimation of VAT losses

Our work on estimates of tax fraud will focus on using top-down methods, i.e. inferring tax losses from macroeconomic data from the ESA95 national accounts and associated data. Our working paper (15 pages, PDF) outlines the approach and data sources that we plan to use.

Q11. Are you aware of any other data that can be used as the basis of top-down estimates of VAT losses (beyond the data used in studies mentioned above)?

Q12. We will also be reviewing existing analyses of tax losses based on bottom-up and operational methods (such as national enforcement activities or Eurocanet data). Are you aware of any bottom-up or operational data that has been used to estimate tax losses (other than studies already mentioned above)?

Concept of tax losses for VAT and excise duties

As explained in our working paper (15 pages, PDF) on the definition of tax losses for VAT and excise duties, we propose to use as our main definition of VAT and excise tax losses:

  • the "tax not remitted" definition, which is based on the assumption that fraud takes the form of traders not submitting their VAT return and payment.
  • the "full recovery" definition, which is based on the amount that would be recoverable by the tax authorities (disregarding penalties) if they had perfect information and if all debts were paid.

The difference between them is primarily in the treatment of fraud with the connivance of the consumer, where the full recovery definition gives a higher result than the tax not remitted definition.

Both these definitions of tax losses share the following features:

  • no account is taken of the additional economic activity that might result from the existence of fraud; and
  • no account is taken of the possibility that the final customer may be complicit in the fraud and liable to pay VAT on top of the amount charged by the trader.

These features mean that the amount of calculated tax losses is not the same as the additional amount of tax that would be collected if there was no fraud.

Q13. Do you agree that the "tax not remitted" and "full recovery" definitions are appropriate to present the results of the analysis for VAT and excise, acknowledging that it does not provide an estimate of the amount of tax that could realistically have been collected?

As well as estimates of tax losses due to fraud, some tax administrations produce forecasts (for budgetary purposes) of the taxes likely to be collected in future years. These forecasts may rely on assumptions about improvements in compliance or enforcement, which might be expressed as reduction in tax losses.

Q14. Are you aware of any studies using estimates of tax losses or of changes in tax losses to construct forecasts of tax likely to be collected?

Corporate tax losses

We will be considering corporate taxes at a later stage in the study, and have not yet developed a definition or approach for the measurement of tax losses on corporate income tax. One major issue seems likely to be distinguishing between avoidance and evasion.

Q15. Are you aware of any background work on the definition of corporate income tax losses that we should consider in developing our approach?

Determinants of tax fraud

We will be using econometric analysis:

  • as a tool to estimate tax losses in some areas; and
  • to analyse the determinants of tax fraud (estimated by other means).

Q16. Are you aware of relevant studies in these areas?

Q17. What would you expect the main determinants of the level of tax fraud to be for different taxes and types of fraud? What data sources provide proxy measures for these determinants?

Your details

Privacy policy: We will keep all contact details and e-mail addresses received through this form strictly confidential, and only use this information for the purposes of this study unless expressly allowed to do otherwise by the person to whom the information relates.

Your name
Organisation
E-mail
Telephone
Address
Particular areas of expertise
Any other information or comments
Would you like an e-mail acknowledgement of your submission?
Please confirm my information by e-mail
Do not confirm my information by e-mail

Thank you very much for your assistance.

Reckon LLP is an economics consultancy with expertise in data analysis, economic regulation and competition law.

Reckon home page