Tax law related aspects of the underground economy The aim of this thesis is the analysis of the underground economy and the sources of its genesis and particular tax law related aspects of the underground economy including legal instruments which are used to eliminate and counter it. The goal is also the description of specific kinds of the underground economy policies. This thesis is divided into three chapters. The first chapter brings definition of the underground economy and division of it among black economy, grey economy and home production. The next part of this chapter is dedicated to the causes of the underground economy. Firstly it describes the tax burden with focus on the value-added tax, there is the analysis of the problematics associated with tax evasion and tax avoidance, carousel frauds and tax havens. The second part of this chapter describes illegal work and execution of jobs in the form of unreported employment and a form called "švarcsystém". In the second chapter is the analysis and description of selected institutes of tax law which are used to eliminate the underground economy including illegal work. The institutes are tax inspection, electronic registration of sales, control reporting and work inspection focused on illegal work. The next part of the chapter is dealing with...

Studying how firms and individuals respond to tax policy changes is key to assess their trade-off between equity and efficiency. Among individuals, taxpayers at the top of the income distribution have received special attention in the Public Economics literature. Progressive tax systems disproportionately rely on high income individuals to raise revenues, making them susceptible to strategies adopted by these taxpayers to reduce their tax liability. In the first two chapters of this dissertation, I provide new empirical evidence on the characteristics of high income individuals that can inform the design of tax policies. Chapter 1, focusing on the UK, shows that migrants have become more prevalent among high income individuals, thus altering the composition of individuals in the top 1 percent. Chapter 2, focusing on Italy, provides evidence of long term persistence in economic status among present-day descendants of noble dynasties. These chapters shed light on the characteristics of high income taxpayers and their path to the top of the distribution in these two countries. Understanding the composition of individuals at the top of the income distribution is key for analyzing their response to tax policies and for informing the trade-off between equity and efficiency. Firms too are a central part of the tax system of developed countries. They remit payment of the vast majority of government revenues, either fulfilling their own tax liabilities or on behalf of third parties. As a result, governments implement enforcement strategies to reduce evasion while minimizing their costs. In Chapter 3, I analyze one of these government interventions aimed at curbing tax evasion of Value Added Tax (VAT) in Italy and I provide evidence on a new margin of response adopted by businesses. As the government shifted the responsibility to remit VAT from the seller to the buyer for a subset of transactions in the economy, it altered the distribution of costs between the two sides of the transaction. I show that smaller firms face the largest increase in costs and, thus, exhibit higher exit rates, leading to higher market concentration. Chapter 1, which is joint work with Arun Advani, Felix Koenig, and Andy Summers, studies the contribution of migrants to the rise in UK top incomes.Using administrative data on the universe of UK taxpayers we show that migrants are over-represented at the top of the income distribution, with migrants twice as prevalent in the top 0.1 percent as anywhere in the bottom 97 percent. These high incomes are predominantly from labor, rather than capital, and migrants are concentrated in only a handful of industries, predominantly finance. Finally, we calculate the contribution of migrants and natives to the observed growth in the UK top 1 percent income share over the past 20 years. We find that almost all (92 percent) of the observed growth can be attributed to migration. Chapter 2 documents that present-day descendants of aristocratic dynasties enjoy high economic status in Italy, several decades or centuries after their ancestors received a title. Over this period of time, Italy experienced wars, annexations, political reforms, and a structural transformation of the economy. Yet, the income distribution of noble taxpayers living in Milan in 2005 is shifted to the right relative to the one of all other taxpayers. On average, noble descendants obtain 41,125 Euros (or 1.77 times) more, controlling for observables. Moreover, aristocrats are three times more likely to be involved in firms, either as shareholders or company officials. Chapter 3 analyzes how firms and markets adapt to a reform of the collection of Value Added Tax (VAT), combining a new administrative dataset on firm-to-firm links from Italy and a quasi-experimental research design. The reform shifted the responsibility to remit payments of VAT from sellers to “trusted" buyers, such as government entities and large firms. I present three main findings. First, firm-to-firm links subject to the new rules are more likely to become inactive after the introduction of the new rules. Second, I find that the reform was costly for the average firm. Firms more exposed to the reform experienced lower sales and higher exit rates, relative to the counterfactual. Third, I document that the burden of the reform was not evenly distributed across firms. Small firms were hit hardest, while large firms did not appear to be negatively affected. As a result, I show that markets more exposed to the reform became more concentrated.

Mercantile Law / Mini Dissertation (LLM)--University of Pretoria, 2019. / Mercantile Law / LLM / Unrestricted

Depuis le modèle de référence développé par Allingham et Sandmo (1972), les problèmes liés à la fraude fiscale et particulièrement au lien entre les raisons de conformité fiscale et le montant du revenu déclaré ont été souvent étudiées. La décision du contribuable dépend essentiellement du montant de son revenu réel, du taux d'imposition fiscale, de la probabilité de contrôle, du montant des amendes infligées en cas de détection. Mais d'autres paramètres plus psychologiques qu'économiques sont aussi tenus en compte à savoir le climat social auquel le contribuable évolue, l'utilisation de leurs cotisations par le gouvernement, les normes sociales, ou tout simplement la conscience du devoir fiscal pour le financement des biens publics et du civisme fiscal. Ces faits ne sont essentiellement pas tenus en compte dans un pays en développement comme Madagascar. La fraude fiscale est liée à l'incapacité de l'administration fiscale à assurer pleinement le système de contrôle par manque de moyens et des phénomènes comme la corruption, la présence accrue du secteur informel, l'influence des décideurs politiques. Les études empiriques ont montré que la Taxe sur la Valeur Ajoutée (TVA) reste l'impôt le plus fraudé par les contribuables et que les pertes annuelles pour cause de fraude fiscale sont exorbitantes, avec un montant total avoisinant les 203 millions d'€ de 2007 à 2009 dans les centres enquêtés. / Since the reference model was developed by Allingham and Sandmo (1972), the problems linked ta tax evasion and particularly ta the relationship between the reasons for tax compliance, and the amount of declared income have often been studied. The taxpayer's decision depends primarily on the amount of his real income, on the tax rate, on the probability of control and on the amount of the fines in the case of identified fraud. However, other parameters more psychological than economical arc also taken into account ta identify the social climate in which the taxpayer evolves, the use of their tax contributions by the government, the social norms, or simply the awareness of the duty taxes in order ta support public projects and fiscal public­spiritedness. These facts have not yet been taken into consideration in developing countries like Madagascar. Tax evasion is linked to the incapacity of tax authorities to ensure full control of the system due to a lack of means as well as phenomena such as com1ption, the increasing presence of the informal sector and the influence of the political decision makers. Empirical studies have shown that Value-Added Tax remains the most defraudcd tax by taxpayers and that the annual lasses due to tax evasion are exorbitant, totaling around € 203 million from 2007 to 2009 in the centers participating in the survey.

Tax havens have long been a subject of concern and were nutritiously used mostly by the rich elite and gangsters. In the wake of the financial crisis in 2008 more light was shed on tax havens and it has become an unanticipated central part of the global economy. This study investigates if globalization has a significant effect on the use of tax havens. The question is analyzed through the lens of fiscal policies and the political economy as well as some further interesting dichotomies and dilemmas. The debate of globalizations and its various effects in the world is still ongoing. While the world economy becomes more mobilized the lack of transparency in countries with higher secrecy becomes more apparent. We measure tax haven activity with foreign direct investment and look at both trade-and financial globalization as well as include a set of key control variables. Using a panel data analysis, we find that globalization has a significant positive effect on tax haven activity. However, in our results we also observe a continuing downward trend in FDI since 2015 which could be indicative of a potential upcoming paradigm shift. Findings in this paper facilitate the understanding of both benefits and concerns with tax havens, it shows how tax havens have been affected by globalization but also an estimation for the uncertain future of tax havens.

Title of the thesis: The relation of money laundering and tax evasion in theory and legislation Abstract The thesis deals with the relation of money laundering and tax evasion, predominantly in the international context, because both of these activities are very often organized intentionally in several countries. This makes it difficult to detect and punish them and requires close cooperation between states, both in setting the rules and in enforcing them. It is the international soft-law and hard-law rules that significantly affect national regulation. Therefore, the thesis focuses on those and also on regional instruments within the EU. After describing the development of the two areas' regulation and its gradual intertwining, the thesis discusses the similarities and differences that feature the two areas and identifies the problems and challenges the international community is facing when tackling the two problems - reactive regulation lagging behind, slow implementation and complicated international cooperation, difficulty in measuring the problems (and the associated potential inefficiency in spending resources to fight them) as well as the challenges posed by the flourishing information technology. Possible solutions are proposed in the form of adjusting some aspects of soft law as well as...

and keywords New methods of combating VAT evasion The topic of this work is the rating of the current situation regarding value added tax evasions, which rates the situation de lege lata, identifies its shortcomings and proposes de lege ferenda solutions that could prevent or at least reduce such evasions. The theses also shows practical examples and tries to present situations that can actually occur in the environment of taxes. The first chapter is focused at general description and introduction to the topic of value added tax, while it is very briefly explaining its basic design elements. It also outlines the nature of tax evasion. The second chapter focuses on the limits of financial administration, which lie mainly in its limited staffing capabilities. The chapter emphasizes the need for automation and explains its practical benefits, outlining the basic framework of most tools to fight against tax evasion. The third chapter describes specifically the issue of the so-called control report, points out its predominant strengths and presents it as one of the successful tools in the fight against tax evasion. At the same time, however, the shortcomings of the current legislation are rated and de lege ferenda solutions are proposed. The fourth is focused at the issue of the so-called electronic...

Although many workers have a private household as their workplace, many household employers are unaware of or fail to meet their state and federal payroll tax obligations, thus undermining the workers’ retirement income security. This dissertation uses sixty interviews with household employers and employees in the Washington, DC, area to investigate the causes and conditions of nanny tax evasion. Ethnographic fieldwork and semi-structured interviews indicate that lack of awareness, tax complexity, social norms of noncompliance, and poor personal ethics diminish payroll tax payment; concern over one’s job, personal ethics and altruistic concern for the employee motivate compliance. An analysis of limited IRS data on audits as well as data on Schedule H household employment payroll tax returns reveal that although some unpaid tax was discovered, almost as much tax paid in error was refunded, confirming the importance of complexity as a determinant of compliance. Analysis of results using Kohlberg’s stages of moral development and force field analysis of motives provides insight into employers’ decisions to pay or evade their nanny taxes. Policy recommendations emphasize increasing public awareness, tax simplification, and enforcement.

Background: The ongoing digitalization in the world with accelerated advancement of technology both develops and challenges the traditional view of means of payment. Legal and economic challenges havebeen recognized in regard to Bitcoin, one of these challenges refer to Bitcoin being defined as property of capital which has caused difficulties in individual income declaration and an overall challenge for cryptocurrencies to act as currencies. Furthermore, Bitcoin is being recognized as an investment possibility, however, since Bitcoin transactions are anonymous it contributes to issues within the public economy as profits made from Bitcoin trades are being evaded.  Purpose: The purpose of this study is to analyze tax evasion among Swedish investors when trading with Bitcoin. Furthermore, this study aims to expand the understanding of Bitcoin traders and determine whether some individuals are more likely to evade taxes in regard to trades with Bitcoin. The intentionis to identify whether there is a connection in demographic- and behavioral factors that indicate whether one is more willing to comply with tax obligations or not. This paper further aims to investigate the STA’s perception of Bitcoin in comparison to the general public as well as how the STA work with the challenges that exist today. Method: This study uses a combination of an inductive and an explorative approach with a mainly quantitative research strategy. Three sources of data have been used: 1) an online survey published in forums for Swedish investors, 2) interviews with the STA 3) court orders provided by the STA. Furthermore, a binary logistic model was performed in SPSS to examine statistically significant results. Conclusion: In regard to taxes linked to trades with Bitcoin, the findings of this study confirm that women are more likely to evade taxes, individuals between the ages of 50 and 79 are less likely to evade taxes in comparison to ages ranging between 18 and 29, individuals who are married are more likely to evade taxes than individuals who are single and investors using platforms registered within Scandinavia are more likely to evade taxes. In addition, the findings of this study indicates that behavioral factors such as morale, trust, awareness, social influence and probability of detection may be influential in tax compliance. Furthermore, the study found a deviation in the perception of taxation linked to Bitcoin where the STA does not recognize taxation linked to Bitcoin as a cause of concern whilst the general public find it to be difficult and an increased risk of tax evasion.

Mercantile law / LLM (Tax Law)