Study On Measuring Tax Evasion Of Individuals

Project description:

In an increasingly globalised world, it has never been easier for individual taxpayers to make and hold investments outside of their country of residence. Large amounts of money are kept offshore and go untaxed as taxpayers fail to comply with tax obligations in their home jurisdiction. The EU has taken important steps to fight tax evasion by wealthy individuals. As stressed by the Action Plan against tax evasion (European Parliament 2012), the automatic sharing of information between financial institutions in host countries and fiscal authorities in the European taxpayer’s home jurisdiction is a key tool to promote tax compliance

The key objective of the study is to produce estimates of:

• Unreported assets held by individuals in tax havens
• Corresponding tax evasion on:
  • foregone personal income tax;
  • capital income tax.

Estimates of unreported assets in tax havens are to be produced for each Member State (MS), for the EU as a whole, for the OECD and non-OECD countries as aggregate blocks, as well as large non-UE economies which have been selected on the basis on our preliminary assessment of data requirements and availability. These countries are: the USA, Japan, Russia, Canada, Australia, China, India, South-Korea and Brazil.  A key challenge of the project is data coverage.

Project objectives:

Who are the ultimate true owners? -- this is a key question that will run through the Assignment. To address this and other data gaps, assumptions will be necessary.

Central to the proposed methodological approach, every effort will be made to:

• Make explicit and report all assumptions used in the estimations.
• Identify critical assumptions in a chain of often complex computations. By critical assumptions, it is meant those assumptions that have the strongest impact on final estimates.
• Substantiate and challenge critical assumptions on the basis of available evidence, and eliminate their need thereof wherever possible.

Project funding: Directorate General Taxation and Customs Union (DG TAXUD)

Consortium leader and Project leader: Economisti Associati srl

Project partners: CASE, Centre for European Policy Studies (CEPS), EUROPE Ltd , wedoIT – solutions GmbH, ECOPA