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Compliance Concerns Considered

Kitty Miv, Editor
15 June, 2022

There are a lot of balls still in the air this week, both politically and economically, but until they come to rest, it might be safer to discuss settled matters in the international tax arena.

With that in mind, in this column, we will be looking at compliance initiatives, starting with the publication by the United States' IRS of its annual 'Dirty Dozen' tax scams list, which alerts taxpayers to schemes and tricks to be avoided.

Internal Revenue Service Commissioner, Chuck Rettig explained, on publication of the list, that:

"These tax avoidance strategies are promoted to unsuspecting folks with too-good-to-be-true promises of reducing taxes or avoiding taxes altogether. Taxpayers should not kid themselves into believing they can hide income from the IRS. The agency continues to focus on these deals, and people who engage in them face steep civil penalties or criminal charges."

The IRS kicked off the 2022 Dirty Dozen list covering four heavily promoted abusive deals that the agency said taxpayers need to avoid. The IRS followed this up with a number of common scams that can target average taxpayers. The tax authority wrapped up its list for this year with four other schemes that are typically targeted at high-net-worth individuals who are looking for ways to avoid paying taxes.

Meanwhile, Nigeria's Federal Inland Revenue Service announced plans to launch a nationwide campaign to identify firms failing to comply with their withholding tax and value-added tax obligations.

FIRS said that, starting July 1, 2022, teams of officers from the Service will visit selected taxpayers, taxable persons (including companies, non-government organisations, ministries, departments. and agencies) to review their VAT and WHT records.

The Finnish tax authority also recently reported on its efforts to challenge withholding tax fraud. The agency said it has been increasing its enforcement work domestically and working with other countries' tax agencies to challenge companies engaged in defrauding the Finnish state and supporting investors to evade tax.

The agency revealed that it has detected approximately 700 million shares that have been traded back and forth between investors to generate withholding tax refunds inappropriately.

Its investigation is into the withholding tax avoidance arrangements and also other types of fraud transactions that have created significant tax losses for other countries' tax authorities.

"Close co-operation and exchange of information with other countries has played an important role in supervision," the Finnish tax agency said.

And finally for this week, in the EU, to step up the fight against cross-border crime, the European Council on June 9, 2022, adopted its negotiating mandates on a proposal regarding digital information exchange in terrorism cases and a proposal to establish a collaboration platform for joint investigation teams.

The proposals are part of ongoing efforts to modernize and digitalize cross-border judicial cooperation, making it easier for prosecutors and judges to exchange information and bring to justice the growing number of criminals and terrorists acting across borders.

Until next week!


About the Author

Kitty Miv, Editor

Kitty was born in Argentina in 1960 to a Scottish cattle rancher and his Argentine wife. Educated in Edinburgh and at Princeton, Kitty worked for the World Bank as an economist, where she met and married an emigre Iranian banker. During her time with the Bank, Kitty worked in a number of emerging markets, including a spell in the ex-USSR as a Transition Economies Team Leader. Kitty is now a consultant in Brussels and has free-lance writing relationships with a number of prominent economic publications. kitty@lowtax.net


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