27th April 2023
Most professionals who operate overseas on a contract basis will be all too aware of the risks of noncompliance with domestic tax legislation. These rulings vary wildly from country to country, however one constant is that governments are scaling up their fights against individuals and organisations that they suspect of breaking regulations in order to claw back tax revenue lost in the preceding years from Covid and global lockdowns. We’ve outlined some of the latest cases that highlight just how quickly the regulatory landscape can shift, and why it’s so important to remain on the right side of the law.
Boris Becker narrowly avoided prison sentence for tax evasion 20 years before recent prison stint
Boris Becker has revealed that his stint in prison is far from the first time that he’s landed in hot water with financial authorities. The German tennis star has faced 30 months in prison as a result of breaking tax laws when he was declared bankrupt. He’s the subject of a new documentary that reveals that he was caught up with a similar case in Germany in 2002. Boom! Boom! The World vs Boris Becker’ covers his life before, during and after his glittering tennis career and discusses how close he came to a three-years and nine-month prison sentence in his home country over 20-years ago. In the two-part, Apple TV+ film, Becker revealed that his home in Miami was raided while he was away on business and he was forced to settle for around £112,000 in order to avoid the aforementioned time in prison. Authorities claimed that Becker was a theoretical resident in Munich while his official residence was listed in Monaco. As well as the fine, Becker received two years of probation, although he did obviously end up serving time for financial offences in recent years, highlighting that no one – regardless of their fame or status – is safe from investigation.
Kyrgyzstan and Azerbaijan hold talks over tax evasion legislation
As of April 5th this year, Kyrgyzstan and Azerbaijan are holding joint talks over potential tax evasion legislation, specifically on the avoidance of double taxation and the prevention of evasion. The Ministry of Finance of the former nation met with its Azerbaijani counterparts to establish a bilateral agreement, one of a number of similar schemes that Kyrgyzstan is working on, that are designed to regulate tax relations between partner countries by granting each state the right to tax certain types of income and capital with an overarching goal of eliminating double taxation. A secondary benefit of establishing this new legislation is to attract further foreign investment, however the changing laws present challenges for professionals operating in the two nations who may already struggle to keep abreast of the latest legal developments. Legislation within the two Central Asian economies is already complex, so contractors working in either destination are advised to partner with specialist firms if they are in any doubt over the changing laws and what they mean for them.
Why are more consumers in Greece going cashless?
During the pandemic, most developed economies saw a major shift away from cash-based payments and towards cashless or contactless payment models. Many of these nations have seen a natural rebalance since lockdowns abated, however in what have historically been cash-centric countries like Greece and Japan, it has proven to be more challenging for consumers and businesses to get used to this new way of operating. Out of all European countries, Greece has one of the lowest levels of financial confidence in its government, which many have cited as a driver behind its high tax evasion rate. For many Greeks, avoiding taxes has been seen as a way to get by in a country where taxes are perceived as high and the government is seen as inefficient and corrupt. The adoption of Blockchain technology has been suggested, however for the time being the landscape in Greece remains complicated, and professionals working here have been advised that they will need to deal with a challenging financial landscape in order to remain compliant. As one of the more popular contractor destinations in Europe, it will be interesting to see how firms and individuals based here on a contract basis will cope with these unpredictable times. However, while the government still looks to rebalance an economy that was particularly hard hit by a drop in tourism during the pandemic, they are still on the hunt for those who’ve committed tax evasion and won’t hesitate to prosecute those it suspects have broken the law. As few expatriate professionals working here have a detailed understanding of the domestic language, they are advised to speak to experts with an understanding of local tax models before committing to a role.
French international footballer sentenced to 6 months in prison for tax evasion
And finally, a French striker who has repeatedly been linked with moves to the UK has been sentenced to six months and a day in prison and ordered to repay a €133,798 fine for tax evasion by a court in Spain. Wissam Ben Yedder, who spent three seasons at Sevilla before moving to Monaco in August 2019, has had the sentence suspended, however a ruling from the Provincial Court of Seville on March 9th found him guilty of failing to submit an income tax return on time and ‘consciously falsifying’ a self-assessment by not declaring interest he received as income in three accounts, as well as failing to declare earnings from a major Adidas sponsorship deal. The fine imposed on Ben Yedder amounts of 50% of the total of the defrauded fee however the suspension of his sentence is conditional on him not reoffending during this time. Considering that the striker earns an estimated £129,000 per week – or £6,708,000 per year – for playing for Monaco, the case highlights that wealth, earnings and the fact the crimes took place over three years ago did not prevent authorities from prosecuting, and should serve as a warning to any professionals operating in Spain either now or in the future.
As you can see, government bodies are on the lookout for lost revenue and won’t discriminate between either large or relatively small offenders if they suspect that someone has broken the law. Here at 6CATS International we offer assistance with compliance, engagement structures and payment processes – amongst other services – so if you’re in any doubt about your legal status, then get in touch with us before agreeing to an overseas contract role.
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