WP 1 - Case studies of tax crimes and illicit money flows
Objectives
PROTAX aim to identify different approaches to tax crimes in six different countries, by means of case studies focusing on legal methods, prosecution techniques, convictions and impact on future policy and the roles of the various involved actors.
Description of Work
The case studies illustrate:
- How LEAs are engaged in the case (via FIU communication, whistle-blower disclosure, LEA investigation).
- The role of professional enablers.
- The type of prosecution (civil or criminal).
- The prosecution techniques proved to be the most effective.
- How a tax authority and/or an LEA may negotiate a deal that a court may reject.
- How courts want to see tax crimes treated like other crimes, with no ‘sweetheart’ deals.
- How whistle-blowers are treated across different jurisdictions in the EU.
- The types of sentences handed to tax criminals.
WP 2 - Focus groups to explore institutional practices in anti-money laundering and tax
Objectives
As part of this work package, PROTAX holds a set of focus groups in most or all Member States. Partners have invited tax authorities, those who prosecute tax crimes and relevant enablers. The purpose of the focus groups is to gather empirical data from the participants, which can be used for a comparative analysis of the different legislative and institutional approaches to tax crimes (developed in WP3).
Description of Work
- Identify relevant stakeholders in all 28 Member States.
- Prepare a bespoke questionnaire to use as the basis for their interviews and discussions with tax authorities and policy-makers in the focus groups.
- Invite stakeholders to the focus groups to identify similarities and differences in the treatment of tax crime as well as to identify best practices.
- Conduct focus groups in Member States to discuss and identify tax crimes in the Member States, to brainstorm on ideas for countering tax crimes, to consider the limitations on information-sharing and what could be done to leverage scarce LEA resources.
- Prepare and circulate a report summarising the focus group discussions to all stakeholders so that focus group participants can compare their country’s approaches to tax crimes in the other Member States. Summaries will not include any personally identifiable information.
- Prepare and conduct a conference to discuss the results of the focus groups with representatives of all stakeholders to discuss the findings and to generate preliminary recommendations.
WP 3 - Legal and institutional analysis of illicit financial flows in the European Union
Objectives
In this work package, PROTAX describes tax crime and its varied treatment across the Member States, identifying best practices and making recommendations to reduce tax crime and deter enablers (accountants, auditors, banks, associations).
- Create one or more taxonomies of tax crimes in the EU, including a comparative analysis of the different legislative and institutional approaches to tax crimes – at the Member State, EU and international levels.
- Show how tax crimes impact good governance and public revenues.
- Analyse the role of enablers in tax reporting and information sharing.
- Examine the socio-economic background of companies and individuals involved in tax crimes.
Description of work
- Producing a report to be used as a reference source with a set of benchmarks by tax authorities and policy-makers in the Member States based on a comparative analysis of the different legislative and institutional approaches to tax crimes.
- Characterise the human factor in terms of the victims of tax crimes. Partners investigate how different types of tax crimes and their scale has a negative impact on individuals and create collective damage.
- Characterise the human factor in terms of the enablers of tax crimes. Partners describe the role of enablers in tax reporting and information sharing.
- Characterise the human factors in terms of the perpetrators of tax crimes. Partners take a micro-perspective and examine the socio-economic background of individuals identified as being involved in tax crimes. Partners investigate whether company size or socio-economic background has an impact on how tax authorities conduct prosecutions putting to an empirical test the hypothesis that persons with low income are more frequently prosecuted than wealthy individuals.
WP 4 - Stock-taking and gap analysis of current strategies
Objectives
In this work package, PROTAX uses the data assembled in WPs 1, 2 and 3 to perform a gap analysis in order to:
- Explain why some countries are more successful than others in the prosecution of tax crimes.
- Create a set of benchmarks for the adequacy of enforcement practices.
- Assess the adequacy of resources for combatting financial crimes and the return on the value of investigators.
Description of work
- Identify and analyse convictions in selected Member States. Conducting this research, partners examine why some countries are more successful than other countries in obtaining convictions of tax crimes, looking at information-sharing methods, legal frameworks conviction and crime statistics.
- Benchmark enforcement practices. Drawing on the case studies in WP1 and the data generated in WP2 and WP3, PROTAX creates a set of benchmarks for the adequacy of specific enforcement practices. The benchmarks address problems of consistency in revenue practices within and between countries, the effectiveness of communication between relevant authorities and discrepancies regarding legally required evidence to make a criminal and/or civil case for tax crimes in national jurisdictions.
- Conduct a gap analysis of enforcement practices. Partners’ analysis enables an evidence-based comparative assessment of enforcement in the various Member States. (e.g. some countries with tax laws facilitating enforcement may have high rates of tax crimes, while in other countries with less enforcement-friendly legal instruments, tax crime and conviction rates may be relatively low). It will also address the need for harmonisation (‘Europeanisation’) of approaches to tax crimes and to demonstrate the need for mechanisms to better deal with cases of trans-boundary tax crimes.
WP 5 - Addressing the challenges of information-sharing and best practices
PROTAX investigates obstacles and best practices as regards information-sharing in the context of combating tax crimes, in order to:
- Improve sharing of information, best practices and knowledge between policy-makers and LEAs.
- Provide recommendations and guidance in the context of cross-border investigations of organised crime.
- Promote best practices and excellence in tax-compliant practices and operations.
- Identify best practices in forensics, evidential elements and proof needed for prosecution and successful conviction.
Description of work
PROTAX promotes new strategies to overcome obstacles and share existing best practices across the EU. This research allows partners to:
- Identify and map information-sharing frameworks, tools and practices.
- Analyse the effectiveness of existing information-sharing mechanisms.
- Address the challenges of information-sharing in the context of prosecution, identifying best practices in forensics and prosecution.
On the basis of this research, PROTAX goal is to create a report of evidence-based and context-sensitive best practices.
WP 6 - Data protection, privacy, ethical and social considerations
Objectives
In conducting this research, PROTAX addresses data protection, privacy, ethical and social issues arising from prosecution of tax crimes as they have been met in the course of the project, in case studies and focus groups.
Description of work
- Analyse ethical, legal, social and privacy considerations arising in the enforcement. Special consideration will be given to the treatment of whistle-blowers.
- Conduct an ethical impact assessment of case studies.
- Develop a framework for the ethical impact assessment of tax crimes.
- PROTAX develops an innovative methodology for the ethical impact assessment of questionable tax avoidance schemes.
WP 7 - Tool kits and risk assessment for policy-makers and LEAs for combating tax crime
Objectives
This work package focuses on:
- Developing a toolkit for policy-makers highlighting how legal reform could proceed towards a harmonised European approach.
- Developing a toolkit for law enforcement and tax authorities providing examples of effective pathways for transforming information to intelligence and discussing the pros and cons of criminal and civil enforcement in tax crimes.
- Developing a risk analysis methodology for enablers to spot red flag issues.
- Convening a workshop to present the toolkits and methodology to stakeholders.
- Establishing sustainable communication in the heterogeneous European network of stakeholders working in the area of tax crime.
Description of work
PROTAX develops a toolkit to help policy-makers to identify:
- The type of evidence admissible and necessary in tax crime cases for investigation, prosecution and successful conviction.
- Existing information-sharing agreements between Member States and their LEAs.
- The harmonised elements of laws and regulations designed to combat tax crime.
- Legal protection available to whistle-blowers who report tax crimes.
- The elements of whistle-blower protection that require European streamlining.
- The communities of professional practice and knowledge that can feed expertise into the drafting of legislation.
PROTAX understands the toolkits and methodologies developed as a living set of solutions and suggestions which will be available through an information-sharing platforms.
Partners’ work leads also to the development of a toolkit for LEAs and tax authorities providing relevant information such as:
- Case studies which depict different types of evidence necessary for securing a conviction in selected EU Member States.
- Examples of effective pathways for transforming information to intelligence.
- Pros and cons of criminal and civil enforcement in tax crimes.
PROTAX is able to offer a risk assessment methodology that is specific to tax crimes, providing practitioners with a checklist of suspicious behaviour and warning signs indicating a tax crime or money laundering.
The creation, optimisation and exploitation of the resources generated within PROTAX see a direct engagement of law enforcement agencies, prosecutors, policy-makers and other relevant stakeholders.
WP 8 - Practical demonstrations via webinars and recommendations
Objectives
Developing realistic scenarios, PROTAX demonstrates step-by-step how information-sharing, investigative tools, and legal processes are involved in dealing with tax crimes.
Description of work
The research developed aim to:
- Demonstrate the toolkits via interactive learning, for example conducting practical demonstration via webinars.
- Improve the protection and resilience of victims and enablers.
- Briefing paper to the political institutions of the EU addressing the European Parliament, the Council and the Commission.
WP 9 - Dissemination, exploitation and communications
Objectives
In this work package partners outline the strategy to identify relevant stakeholders’ communities, key messages and the various activities in order to ensure the take-up of the project’s results by key stakeholders, including the general public, during and after the project.
Description of work
Elaborate and initiate implementation of a dissemination and exploitation plan, indicating:
- What benefits and results will be delivered to stakeholders.
- What messages PROTAX wants to deliver to each of the different stakeholder groups.
- How the stakeholders can access and exploit the project results.
- Those activities aimed to get the results of the project used during and after the project comes to an end.
- The barriers to take-up that must be overcome.
Elaborate and implement the project’s communications plan with an emphasis on showing the public how tax authorities are tackling tax crime.
Establish an online and media presence, via the website, social media, videos and reaching out to specialised press and media outlets for the general public.
WP 10 - Project co-ordination and management
This work package is dedicated to:
- Effectively and efficiently coordinate and manage the project.
- Ensure the project’s compliance with the EC’s financial guidelines.
- Co-ordinate and implement the project’s data management plan.
- Interface with the project’s advisory board.
Click here to see this work package’s public deliverables.