Data is the key to fighting tax evasion

data tax evasion

12th February 2018

Recruiters might have heard of the use of data analytics in the hiring and management of people, but it’s also being used for much more, including the fight against tax evasion. According to recent reports, Irish authorities are using these analytics to sniff out tax frauds in the financial information that is now being shared across borders.

Tax authorities utilising data

As many readers of our blog will know, with the introduction of the Common Reporting Standards (CRS) and the Foreign Account Tax Compliance Act (FATCA), authorities worldwide have been sharing and receiving information on citizens’ financial records. However, this has presented the challenge of sifting through the data and cross-referencing information with existing records in order to identify fraudulent behaviour.

Ireland’s government agency, the Revenue Commissioners, has started using data analytics as a means of solving this problem, including cross-checking social media accounts to identify any inconsistencies. And according to recent reports, it’s yielding results already.

Irish nationalities facing scrutiny

According to Irish newspaper, The Sunday Independent, as a result of the analysis of data from the US, the Revenue has already been contacting individuals who have failed to declare assets in America.

This latest development is another step in Ireland’s fight against tax evasion. Following changes to the 2016 Finance Act, authorities gave citizens a deadline of May 2017 to voluntarily disclose any assets and finances hidden offshore. This resulted in payment of almost €84 million to the Revenue.

However, with the deadline now up, defaulters will now face possible penalties of 100% of the tax evaded, and the Revenue is stepping up its enquiries to sniff out and pursue any fraudsters involved in offshore evasion schemes.

There’s no place to hide

With authorities using the likes of data analytics to sift through the masses of information now available and identify inconsistencies, evaders are losing much of the smoke screens they used to be able to hide behind. However, while these tools are being used to identify deliberate acts of evasion, they can also pull out discrepancies that are accidental or may have occurred due to a misunderstanding of often complex international tax requirements.

As a key point of contact for information during the move across borders for work, recruitment firms working with contractors on international placements are likely to find themselves facing queries on compliance and employment taxes. But with authorities seeking to make an example of wrong-doers in the fight against tax evasion, the risks are high for both contractors and recruiters. Partnering with an expert, then, really is a must.

6CATS International is the leading global brand and supplier of contractor management solutions and our team of experts provides recruitment agencies with the highest levels of service whilst also offering complete compliance assurance.

To give extra reassurance, when using our solutions, we also fully indemnify recruitment businesses and end users from any tax compliance liability. So, what are you waiting for? Speak to the team today:


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