The OECD Task Force on Tax Crimes and Other Crimes (TFTC) held its 27th meeting in Paris May 2024, including heads of tax crime investigation from 56 countries. 

The launch of TFTC Report “Designing a National Strategy against Tax Crime: Core Elements and Considerations” was released.

The aim of this report is to support jurisdictions in implementing Principle 2 of the OECD Recommendation of the Council on the Ten Global Principles for Fighting Tax Crime (the Recommendation) (OECD, 2022).

Principle 2 Overview

• Strategy Development:
  • Devising a strategy to address tax crimes.
  • Includes identifying existing and emerging risks and threats.
  • Mechanisms for regular review and monitoring of the strategy's implementation and effectiveness.
• Definition of Tax Crime:
  • Conduct that violates tax law and is subject to criminal procedures within the justice system.
  • Includes violations of income tax and indirect tax obligations (e.g., VAT or GST).
  • Excludes other financial crimes such as customs and excise taxes, corruption, bribery, or money laundering.
  • Despite the exclusion, these crimes are relevant to tax crime risk assessments and strategies due to strong interlinkages.

Strategic Considerations

• Types of Tax Crime:
  • The Recommendation does not differentiate between types of tax crime.
  • Important to develop strategies that may take different approaches to various types of tax crime.
  • Consideration of civil versus criminal actions in particular cases.
• Multi-Agency Involvement:
  • Multiple government agencies may be involved in detecting, investigating, prosecuting, and recovering proceeds of tax crimes.
  • Strategies must reflect the roles of different agencies.
  • Agency types, layouts, and powers vary by country:
  • Single agency, such as a tax administration.
  • Multiple agencies (e.g., police, prosecution service, specialized financial crime agencies).

Responsibility for National Tax Crime Strategy

• Agency Responsibility:
  • Depends on the organizational structure of the jurisdiction.
  • Factors include the legal system, policy context, legislative environment, and general law enforcement structure.
  • Approaches:
  • Tax administration directing and conducting tax crime investigations.
  • Responsibility split across multiple agencies (e.g., police, public prosecutor, specialized agencies).
• Survey Insights:
  • OECD Tax Administration Series (TAS) survey of 58 tax administrations:
  • Approximately 45% have responsibility for directing and conducting tax crime investigations (OECD, 2023).
  • In other jurisdictions, tax administrations conduct investigations under the direction or authority of another agency.
  • In some cases, tax crime investigations are entirely the responsibility of other agencies (e.g., police, public prosecutor, specialist tax or financial agency).

Source/ recommended read: 

• 0e451c90-en.pdf (oecd-ilibrary.org)