SECOND MEETING OF THE OECD GLOBAL FORUM ON VAT April / Tokyo, Japan

Transcription

1 SECOND MEETING OF THE OECD GLOBAL FORUM ON VAT April / Tokyo, Japan

2 Tackling VAT Fraud Keynote Address Setting the Scene Prof Michael Walpole UNSW, Australia 2

3 The scale and incidence of VAT fraud Many forms e.g. false invoices; missing trader; non reporting VAT can encourage fraud Structural reasons the refund/credit system zero rating timing features income tax fraud and VAT fraud are double incentives to enter the cash economy 3

4 The problem of VAT fraud. Examples of scale and potential for harm 05/10/10 ATO Media Release NSW man found guilty of GST fraud after submitting false BAS and trying to claim $500,000 in his role as company director sentenced to 3 years in prison, with a non-parole period of two years Victorian woman found guilty of GST fraud after lodging false BASs under three different ABNs and receiving $233,581 in refunds. A fourth attempt was made for a claim of $132,058 sentenced to 20 months imprisonment 4

5 Examples of scale and potential for harm 30/10/13 ATO Media Release ATO investigates companies in the gold bullion industry suspected of GST fraud totalling more than $65 million. The ATO, Australian Federal Police and Australian Crime Commission executed search warrants on premises associated with companies operating in the gold bullion and precious metals industries. Alleged the companies fraudulently claimed GST credits and failed to report GST correctly. They formed syndicates to conceal the true nature of their activities and to avoid detection. ATO issued garnishee notices and GST amended assessments with liabilities of more than $130 million. The sheer amount of money involved in this matter and the activity undertaken to disguise its movement means we are treating this as an organised criminal activity 5

6 Examples of scale and potential for harm HMRC 13/3/14 HMRC Media Release 15 men arrested as part of an investigation into a suspected 30 million VAT fraud linked to the electronic communications industry Raids in Stoke, London, Glasgow, Bristol, Birmingham, Newcastle upon Tyne, Derby, Manchester and Scunthorpe. Raids were also carried out in Cyprus at the same time. 240 HMRC officers searched 24 residential and business premises in the UK and seized business accounts and computers. We are investigating what we believe to be a large-scale, organised VAT fraud extending across the UK and abroad. The operation today sends out a clear message that we will relentlessly pursue those suspected to be involved in tax fraud. 6

7 Strategies to detect and address VAT fraud Structural changes» Reduce rate differentiation» Lower rates» Exemptions rather than zero rates» High registration thresholds Targeted actions» Withhold refunds pending audit» Gold card schemes» Reverse charging especially for vulnerable categories» Joint liability for tax in the chain» Guarantees» VAT accounts» Digital invoices» Others 7

8 Available instruments for administrative cooperation and exchange of information Examples The Convention on Mutual Administrative Assistance in Tax Matters EU s VAT Information Exchange System Eurofisc Tax Information Exchange Agreements (OECD Model TIEA) 8

9 The role of business in combatting criminal attacks against VAT system Some views Business as fraudster Business as victim Business as solution 9

10 Discussion 10