The evasion of taxes It is a worldwide problem. According to the report “The State of Tax Justice 2023”, by Tax Justice Networkit was warned that up to $472 billion could be lost annually in taxes over the next decade, all due to the evasion tax on the part of the multinationals and billionaires who transfer their wealth to tax havens.
Of this figure, 63.77% comes from companies that relocate their profits, while 36.23% are hidden by the richest. Although large economies suffer the greatest losses in absolute terms, low-income countries are the most affected in relation to their tax revenues, as explained Tax Justice Network.
To address the problem, the report suggested the need for a UN tax convention and the creation of a global tax body that empowers citizens and allows governments to exercise their tax sovereignty effectively.
How do they fight against evasion fiscal?
The European Union (EU) implemented in June of this year a series of measures to fight against evasion and the tax avoidancefocusing on creating a fairer and more transparent environment.
Among the main ones, the creation of the Anti-Tax Avoidance Directive (ATAD) stands out to establish minimum standards in measures, such as the prevention of hybrid mismatches, limitations on the deduction of interest and regulation of the abuse of tax treaties.
Likewise, information exchange mechanisms between member states and third countries were increased. The EU has been promoting the Automatic Information Exchange System on financial accounts since 2011 so that tax authorities can track assets abroad more effectively.
To point out a more specific case, the fight against tax fraud in Spain presents a main challenge to guarantee the tax justice and improve the collection efficiency of the system.
In the country there is the Anti-Fraud Law, approved in 2021, and its objective is:
- Expand the concept of tax haven: redefining the concept according to criteria of transparencyzero taxation and preferential tax regimes.
- Limit cash payments: With the intention of facilitating the traceability of transactions and making fraudulent practices more difficult.
- Expand the debtor regime: The subjective and objective scope of the list of debtors to the Public Treasury will be expanded, increasing fiscal responsibility.
- Ban the tax amnesties: Amnesties that allow taxpayers to regularize their situation without sanctions will be prohibited, seeking more rigorous compliance.
- Prohibit ‘dual-use software’: Tools that allow manipulation of tax information will be eliminated, guaranteeing greater transparency.
- Assess reference in taxes assets: A new criterion will be incorporated that will serve as the tax base for the taxes assets, improving tax equity.
In the case of the United States, the Foreign Account Tax Compliance Act (Fatca) was implemented in 2010, forcing financial institutions abroad to report information on the accounts of US citizens, discouraging evasion tax through transparency.
Likewise, the Internal Revenue Service (IRS) intensified its audits and monitoring, using advanced technology and data analysis to detect suspicious patterns, allowing you to quickly identify possible fraud and improve the effectiveness of the audits. In addition, they require financial institutions to submit Suspicious Activity Reports (SAR), which facilitate the investigation of transactions that could indicate evasion fiscal.
Sentences of 20 years jail
When tax evasion occurs, the sanctions imposed by governments can be monetary and even jail. One of the countries with sorrows South Africa is the highest, as it can reach up to 25 years. A similar thing happens in Greece, which lasts up to 20 years.
Slovakia has a maximum penalty of 13 years for those who do not properly pay taxes. Czech Republic, Germany, Austria and Australia have up to 10 years.
