6th April 2017
Barely a week has passed recently without another country redoubling its efforts to reclaim lost revenue by tackling tax evasion and the firms facilitating it. However, not all countries are committed to the same standards.
While Slovakia has been praised for its measures to tackle tax fraud and non-compliance which have reduced its VAT gap, the country has also been advised to take on value added tax and corporate tax evasion by the International Monetary Fund.
Countries doubling their efforts
In recent years numerous nations including Italy, Germany, the UAE, Panama, Cuba and many, many more have upped their efforts to tackle evasion with varying degrees of success. According to reports – and of course our regular blog – this has resulted in many of these nations increasing their taxation revenue, which has contributed to upturns in many of their economies.
Slovakia still struggling
However, in Slovakia evasion remains high, particularly in the fields of construction, trade and transportation. The IMF said the establishment of a well-defined corporate income tax base and increased targeted compliance efforts on sectors with the highest rates of evasion would support authorities’ attempts to balance the budget by 2019. It also said there’s scope for additional revenue to be claimed from reforms to residential property tax, capital gains tax and environmental taxes. But the country has also been advised to take these regulatory developments slowly, and look to first take on value added and corporate tax policies.
It’s becoming increasingly difficult for firms around the world to get away with any transgressive behaviour and the growing adoption of the Common Reporting Standard has made the situation even more challenging for those committed to breaking the law. And if Slovakia wants to be able to join the fight against evasion, it too needs to meet these standards. For firms that are dedicated to operating compliantly there are also numerous opportunities for them to trip themselves up and land themselves – or even their end clients – in seriously hot water.
If you’re at all unsure about the tax status of contractors you’re placing overseas then ensure you get in touch with the specialists before it’s too late.