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CORPORATE CRIME OBSERVATORY
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VIRTEU
REPORTS AND TECHNICAL PAPERS
Through this page, it is possible to access the reports and technical papers produced by the VIRTEU research project's Core Research Team as well as the Leading Experts and Research Associates, which explore the interconnections between tax crimes and corruption from different perspectives and with a special focus on different select jurisdictions.
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In particular, besides the Core Research Team, the work of VIRTEU Experts falls into three different categories:
• Leading Area Experts
These reports have been prepared by high-level specialists, who have established expertise areas of knowledge that have particular relevance for exploring the interconnections between tax crimes and corruption.
• Leading National Experts
These reports have been prepared by high-level specialists, who have established expertise in the functioning of the domestic legal systems on which the VIRTEU project was focused (i.e., Bulgaria, Denmark, Greece, Italy, the Netherlands, and the United Kingdom).
• Research Associates
These reports have been prepared by experts who have analyzed a specific research topic that has particular relevance for the purposes of the project; or who have enhanced the multidisciplinary approach of the project offering insights from a different scientific discipline.
VIRTEU - LEADING NATIONAL EXPERTS REPORTS
The interconnections between tax crimes and corruption in the United Kingdom
Dr. Branislav Hock, Senior Lecturer in Economic Crime at the University of Portsmouth
September 2021
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This report explores the interconnections between tax crimes and corruption in the United Kingdom, with a special focus on Value Added Tax (VAT) fraud. In the United Kingdom, policing corporate economic crime and especially tax crime presents a regulatory challenge. VAT fraud, for example, often includes complex interactions between multiple foreign subcontractors and other companies. Moreover, tax systems may feature economic, legal, and political inequalities, allowing for an improper tax advantage by bending the rules of the tax system, taking advantage of the technicalities of a tax system, or mismatches between two or more tax systems. When investigating and prosecuting tax fraudsters and other criminals, criminal justice agencies face substantive, procedural, and operational obstacles. In the United Kingdom, these phenomena are affected by the complexity of the legislative and regulatory mechanisms targeting both criminals and those that facilitate tax crimes. To identify key problems associated with tax fraud and suggest effective solutions, the report offers a collective action perspective in order to evaluate responses to complex problems such as transnational tax fraud and contribute to the development of remedial actions against cases of fiscal corruption.
Suggested Citation
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APA: Hock, B. (2021). The interconnections between tax crimes and corruption in the United Kingdom. Retrieved from https://www.corporatecrime.co.uk/virteu-reports
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HARVARD: Hock, B. (2021) The interconnections between tax crimes and corruption in the United Kingdom. Available at: https://www.corporatecrime.co.uk/virteu-reports
OSCOLA: Branislav Hock ‘The interconnections between tax crimes and corruption in the United Kingdom’, (Corporate Crime Observatory, September 2021), <https://www.corporatecrime.co.uk/virteu-reports>
Forensic Accounting, Auditing, and Tax Corruption
Prof. Atul Shah, School of Arts and Social Sciences, City University of London
November 2021
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This report explores the practices of tax avoidance and evasion which often undermine efforts by states to collect fair taxes and provide valuable infrastructure. In particular, it focuses on the role of professional accountants and lawyers in enabling tax corruption by using their skills and knowledge of the rules to help corporate and individual elites exploit any gaps and thereby minimize the payment of taxes. These professional individuals, institutions and networks are increasingly powerful in undermining tax collection as evidenced in scandals like Panama Papers, LuxLeaks and Paradise Papers. International business provides an additional opportunity for firms to move money between jurisdictions and exploit differences in tax treatments in different parts of the world. Offshore tax havens and secrecy jurisdictions make the problem of global enforcement of tax collection very difficult and encourage a race to the bottom in tax collection – countries are forced to compete against one another for reducing their taxes to attract business. This reduces the revenues they earn to provide critical and economical public services. Common techniques of tax avoidance are explored and methods used to detect and monitor aggressive tax practices are discussed.
Suggested Citation
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APA: Shah, A. (2021). Forensic Accounting, Auditing, and Tax Corruption. Retrieved from https://www.corporatecrime.co.uk/virteu-reports
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HARVARD: Shah, A. (2021) Forensic Accounting, Auditing, and Tax Corruption. Available at: https://www.corporatecrime.co.uk/virteu-reports
OSCOLA: Atul Shah ‘Forensic Accounting, Auditing, and Tax Corruption’, (Corporate Crime Observatory, November 2021), <https://www.corporatecrime.co.uk/virteu-reports>
Tax Compliance Through Governmental Capture: An Ethical Assessment
Prof. Daniel T. Ostas, James G. Harlow, Jr. Chair in Business Ethics at the University of Oklahoma
January 2022
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This report focuses on the symbiosis between government officials and taxpayers that allows a huge and widespread tax gap to persist. It finds moral blame among both government officials and taxpayers. High-income earners and corporate actors often find ways to conceal income through tax shelters and the offshoring of profits. Today, there is an estimated $32 trillion of untaxed money reported in places where no money was earned and then reinvested around the globe. The report explores the symbiosis between government officials and taxpayers that allows this staggering tax gap to persist. It also discusses how the judiciary plays a role in supporting the tax gap and highlights how legislators also share part of the blame for failing to close tax loopholes. While this report offers a U.S.-centric perspective, its ethical insights apply wherever one finds a symbiotic relationship between tax evasion and government corruption. In particular, the ethical analysis in this report applies to E.U. and U.K. tax contexts that rely on “big four” accounting expertise, experience tax erosion through profit shifting, and suffer from undetected tax evasions of various forms. In short, the tax gap, including its ethical dimensions, is of global concern.
Suggested Citation
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APA: Ostas, D. (2022). Tax Compliance Through Governmental Capture: An Ethical Assessment. Retrieved from https://www.corporatecrime.co.uk/virteu-reports
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HARVARD: Ostas, D. (2022) Tax Compliance Through Governmental Capture: An Ethical Assessment. Available at: https://www.corporatecrime.co.uk/virteu-reports
OSCOLA: Daniel T. Ostas ‘Tax Compliance Through Governmental Capture: An Ethical Assessment’, (Corporate Crime Observatory, January 2022), <https://www.corporatecrime.co.uk/virteu-reports>
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The interconnections between tax crimes and corruption in Bulgaria
Ruslan Stefanov
Director, Economic Program, Center for the Study of Democracy
VIRTEU Leading Expert for Bulgaria
in cooperation with
Daniela Mineva, Juan David Abella Osorio, and Kristina Tsabala
February 2022
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This report, which is focused on the phenomena of tax crime and corruption, is divided into four main sections. In the first part, the most significant Bulgarian legislative instruments in the fight against tax crimes are reviewed. This first section highlights that Bulgaria suffers from chronically high corruption, low trust in government, and serious rule of law shortcomings. The second part addresses the critical examination of the complex links between fiscal crime and corrupt practices in Bulgaria. It also warns that the fight against VAT fraud is the most serious challenge for Bulgarian tax administrations and that it requires the establishment of balanced but sufficiently robust measures. This balance is not easy to achieve, especially when networks of fraudsters have penetrated state institutions. The third part refers to the analysis of corporate liability and whistleblowing in the area of taxation. In that regard, it emerges that, although the country is a party to several anti-corruption conventions, clear and comprehensive procedures for the protection of whistleblowers do not currently exist in Bulgaria. Finally, the fourth part focuses on some specific practical institutional challenges in Bulgaria as identified in a national practical workshop with various stakeholders.
Suggested Citation
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APA: Stefanov, R. et al. (2022). The interconnections between tax crimes and corruption in Bulgaria. Retrieved from https://www.corporatecrime.co.uk/virteu-reports
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HARVARD: Stefanov, R. et al. (2022) The interconnections between tax crimes and corruption in Bulgaria. Available at https://www.corporatecrime.co.uk/virteu-reports
OSCOLA: Ruslan Stefanov ed al. ‘The interconnections between tax crimes and corruption in Bulgaria’, (Corporate Crime Observatory, February 2022), <https://www.corporatecrime.co.uk/virteu-reports>
The interconnections between tax crimes and corruption in Italy
Antonio Gullo
Full Professor of Criminal Law, University Luiss Guido Carli
VIRTEU Leading Expert for Italy
May 2022
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The purpose of this report is to explore how widespread or ‘systemic’ corruption can influence the commission of tax crimes, and vice versa. As shown by several scholars, such interaction represents a major issue, particularly in developing countries, where it is reported that approximately 50 percent or more of tax revenue may go uncollected because of fiscal corruption and tax evasion. Not only bribery can be instrumental to commit tax evasion, but also tax crimes can be instrumental to commit bribery. Thanks to tax crimes, taxpayers (both natural and legal persons) can create a black budget aimed at bribing public officials, for example in order to win public procurements – one of the business sectors more vulnerable and exposed to corrupt practices. This report is structured as follows. Section 1 introduces the Italian context; section 2 outlines the main legal instruments in force in the Italian jurisdiction to highlight the possible interrelation between corruption and tax evasion; Section 4 presents the features of the Italian legal system through the lens of specific areas of action – namely, prevention, investigation, enforcement, sanctions, recoveries, and remedies; Section 4 addresses specific research topics selected for their relevance in the context of the present research, such as corporate prevention of tax crimes, ne bis in idem issues and whistleblowing; Section 5 investigates issues of undue influence and institutional challenges in Italy; Section 6 concludes.
Suggested Citation
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APA: Gullo, A. (2022). The interconnections between tax crimes and corruption in Italy. Retrieved from https://www.corporatecrime.co.uk/virteu-reports
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HARVARD: Gullo, A. (2022) The interconnections between tax crimes and corruption in Italy. Available at https://www.corporatecrime.co.uk/virteu-reports
OSCOLA: Gullo, A. ‘The interconnections between tax crimes and corruption in Italy’, (Corporate Crime Observatory, May 2022), <https://www.corporatecrime.co.uk/virteu-reports>
VIRTEU - RESEARCH ASSOCIATES REPORTS
Dr. Ina Kubbe, Tel Aviv University
Dr. Morten Koch Andersen, University of Copenhagen
May 2022
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This report analyses the consequences of tax corruption on human rights. The study explores and illuminates how fiscal corruption; tax evasion and tax avoidance, undermine the state’s ability and capacity to promote, protect and enforce the enjoyment of human rights and can lead to the violation of fundamental human rights. It aims to develop a victim-oriented approach that connects tax evasion, as a form of corruption, to violations of people's rights. We focus on three case studies - the Fresenius model, the Panama Papers, and the Danske Money Laundry Scandal - that are related to the misuse of power in the European banking sector, in order to illuminate the interconnections between fiscal corruption and human rights violations and the possible liabilities of states if they fail to ensure the full realisation and enjoyment of the citizens' human rights. The report concludes that we need to ensure that taxes are paid, and revenues are used to the benefit of the populations. It argues that a human rights perspective can promote proper and correct taxation and allocation of resources.
Suggested Citation
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APA: Kubbe, I., and Andersen, M. (2022). Tax Injustice and Corruption? The adverse effects that tax evasion and tax avoidance exert on human rights. Retrieved from https://www.corporatecrime.co.uk/virteu-reports
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HARVARD: Kubbe, I., and Andersen, M. (2022) Tax Injustice and Corruption? The adverse effects that tax evasion and tax avoidance exert on human rights. Available at https://www.corporatecrime.co.uk/virteu-reports
OSCOLA: Kubbe, I., and Andersen, M. ‘Tax Injustice and Corruption? The adverse effects that tax evasion and tax avoidance exert on human rights’, (Corporate Crime Observatory, May 2022), <https://www.corporatecrime.co.uk/virteu-reports>
Dr. Pietro Maria Sabella, University LUISS Guido Carli
October 2022
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This report analyzes some of the most problematic aspects of the Italian anti-tax crime criminal legal framework. In particular, it focuses on the existing tax gaps, the reasons leading to the lack of voluntary tax compliance, and the most recent tax policies adopted to combat the phenomenon of tax evasion. It explores how the sanction model, characterized by a double track system (i.e., at the same time criminal and administrative), can still be considered somehow infringing the principle of ne bis in idem (i.e., double jeopardy) and how it does not facilitate general tax compliance among taxpayers. Finally, it highlights how confiscation, in particular, “preventive confiscation” can be used to counter fiscal corruption aiming at confiscating illicit, disproportionate, and unjustifiable economic advantages obtained through the perpetration of economic crimes.
Suggested Citation
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APA: Sabella, P. (2022). Sanctions and ne bis in idem in the Italian anti-tax evasion legal framework: “Extended confiscation” to counter fiscal corruption. Retrieved from www.corporatecrime.co.uk/virteu-reports
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HARVARD: Sabella, P. (2022) Sanctions and ne bis in idem in the Italian anti-tax evasion legal framework: “Extended confiscation” to counter fiscal corruption. Available at www.corporatecrime.co.uk/virteu-reports
OSCOLA: Sabella, P. ‘Sanctions and ne bis in idem in the Italian anti-tax evasion legal framework: “Extended confiscation” to counter fiscal corruption’, (Corporate Crime Observatory, October 2022), <https://www.corporatecrime.co.uk/virteu-reports>
VIRTEU - ADDITIONAL DOCUMENTS
Countering Tax Crimes and Corruption: Recommendations for Law Enforcement Officials
Dr. Costantino Grasso, Manchester Metropolitan University
Stephen Holden, Manchester Metropolitan University
July 2022
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The VIRTEU E-Technical Paper is a document that provides a range of practical recommendations for law enforcement officers, tax officials, and those involved in the detection and prosecution of tax crimes and corruption. It has been produced by VIRTEU Research through the recognition of specific sectoral vulnerabilities that may result in tax crimes and corrupt practices, as identified through the research activities of the project, including through international round table events, a symposium, jurisdiction-specific workshops, expert reports, a questionnaire distributed to relevant experts, and an international two-day conference, amongst others. Once such vulnerabilities had been identified, select practical recommendations were developed in order to address them, supported by an evidence basis drawn from the project's research activities.
Suggested Citation
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APA: Grasso, C., and Holden, S. (2022). Countering Tax Crimes and Corruption: Recommendations for Law Enforcement Officials. Retrieved from https://www.corporatecrime.co.uk/virteu-reports
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HARVARD: Grasso, C., and Holden, S. (2022) Countering Tax Crimes and Corruption: Recommendations for Law Enforcement Officials. Available at https://www.corporatecrime.co.uk/virteu-reports
OSCOLA: Grasso, C., and Holden, S. ‘Countering Tax Crimes and Corruption: Recommendations for Law Enforcement Officials’, (Corporate Crime Observatory, July 2022), <https://www.corporatecrime.co.uk/virteu-reports>