CONTEXT & OBJECTIVES
Vat fraud: Interdisciplinary Research on Tax crimes in the European Union
(Grant Agreement no: 878619)
VIRTEU represents an innovative and high-profile legal research project including both an interdisciplinary and a comparative approach. It aims at exploring the interconnections between tax crimes and corruption so to unravel the intimate relationships that exist between fraudulent and corrupt practices in the area of taxation with a focus on VAT fraud, which poses a direct threat to the European Union's financial interests.
Tax corruption is a subtle, pervasive, and dangerous criminal phenomenon, whose dynamics are still obscure and that has not been yet systematically explored. It is now clear that corruption also pervades the systems of the tax administration of several European countries. For instance, in customs, corrupt practices are used primarily to avoid detection and import duties. Similarly, even if to a lesser extent, corruption is used for arranging VAT fraud schemes.
Moreover, different jurisdictions as well as specific tax administrations appear to be vulnerable to different types of corruption. These corrupt practices range from petty corruption, which involves the payment of a bribe to low-level officials to avoid detection and import duties; to administrative corruption, which is characterized by the use of bribery to illicitly lower taxation; and grand corruption, which serves the interests of a narrow group of politicians, senior government officials, businesspeople, or criminal elements. As a result, the study will aim at identifying both institutional (law, procedures, areas of competence, powers, resources) and sectoral (how specific economic/industrial sectors are exposed) vulnerabilities. Moreover, due to the fact that corrupt practices are characterized by shady deals and secrecy, it is extremely difficult to unveil the criminals and their illicit plans. As a result, the research will also focus on the crucial crime reporting role played by whistleblowers as well as on the necessity of implementing effective measures not only to protect but also to award and empower whistleblowers.
Furthermore, the research will explore the articulation between the six main types of actions that may be adopted in the fight against tax crimes: prevention, investigations, enforcement, sanctions, recoveries, and remedies. In particular, as regards sanctions, the research will analyze the pros and cons related to the adoption of sanctions having different nature (e.g., criminal vs. administrative), the issue of ne bis in idem, the criteria of attribution of corporate criminal liability and the use of settlement procedures. The analysis of corrupt practices as well as of the above-mentioned select topics will be carried out in the light of their relevance to the protection of the financial interests of the European Union against tax frauds, which represents the primary aim of the project.
As regards its geographic scope, VIRTEU will focus on six different jurisdictions that will be a representative sample of the EU Member States: Bulgaria, Denmark, Greece, Italy, the Netherlands, and the United Kingdom.
Moreover, thanks to the active participation of high-level specialists, VIRTEU will assure an interdisciplinary approach combining the more traditional areas of knowledge (i.e., legal, socio-economic, and historical perspectives) with forensic accounting, criminology, and psychology.
The investigators will develop innovative solutions and produce recommendations to strengthen the fight against tax crimes and tax corruption at both the EU and the domestic level.
Finally, thanks to its effective dissemination strategy, VIRTEU will assure that the knowledge acquired, solutions developed and recommendation made will be usable by the other Member States as valid means to potentially develop mutual cross-border cooperation in the fight against transnational tax crime.