19 Mar Validating PROTAX tools by a Master Class on VAT-Fraud investigation

The practical demonstration format of the PROTAX Master Class, developed by Austrian partners Ministry of Finance and VICESSE was piloted on 3 March with a group of 15 experts from Austrian tax fraud investigation, EUROFISC and EUROPOL. The idea of the PROTAX Master Class is to familiarise users with the PROTAX Tax Fraud Investigation Framework (TFIF), part of the PROTAX toolkits, in an interactive setting and demonstrate how it can be used in practice. After a brief introduction to the TFIF participants were presented with a model case of a VAT fraud and were asked to discuss the different steps and stages of an investigation to collect court-proof evidence along the TFIF.

This practical exercise nicely demonstrated the role of human factors and the need for an improved cross-national and cross-sectoral cooperation in the investigation and prosecution of VAT fraud. Participants shared their experiences with time-consuming efforts to collect information from different sources, emphasised the role of a wide variety of practical obstacles on a ground level and criticised the incompatible (national) legal regulations playing into the hands of the criminal actors.

Model case of a VAT fraud

The PROTAX Master Class had two main objectives. It served as further validation of the principal findings and tools of the PROTAX project, demonstrating the relevance of the factors, identified in the different work packages impacting the detection, investigation and prosecution of (cross-border) tax crimes. Secondly, it also helped participants to better understand and assess the bottlenecks and thresholds in their forensic work and offered them an opportunity to exchange their views and experiences and discuss suitable strategies. The exchange and discussion of the presented model case of VAT fraud clearly revealed the need for a coherent and better integrated support and information exchange infrastructure on a European level. While the role of EUROPOL and EUROFISC as facilitators in cross-border investigations was acknowledged by participants, it was agreed that more resources should be committed to expanding the capacities and mandates of both entities. On the national level, increased capacities, especially in terms of manpower, should be granted to fiscal law enforcement units. The participants also acknowledged the important role tax audits play in the field of detecting fiscal offences. Therefore, the demand for special training and strong incentives to boost the readiness and willingness of tax auditors to engage in mostly time-consuming investigation, has been articulated.

There has been positive feedback from participants, willing to integrate PROTAX material into professional training programs.

The pilot of the PROTAX Master Class delivered encouraging results and the format should be used in future exploitation efforts bringing together participants from different national jurisdictions giving them an opportunity to rehearse collaborative tax fraud investigations on the basis of realistic scenarios. Such exercises can help to improve mutual understanding across borders and organisations and contribute to better performance and effective investigation and prosecution.