Who are the most aggressive and least aggresive tax authorities?

[blancmon229]

Interested to know, which countries have the most aggressive and least aggressive tax agencies?
Which ones in reality do not have the manpower or capabilities of going after anyone?

I would start with Australia, Spain, Italy, Germany as the most aggressive. Please share.

 

[JohnnyDoe]

HMRC and IRS are no joke.

 

[jafo]

Well, this is one of those questions where I'm excessively proud to be totally ignorant.

 

[Don]

HMRC and IRS are no joke.

Indeed.

Just happened to read a thing or two about HMRC, which made me re-evaluate the perceived risk of using nominee services, and here it goes:

What triggers over % of tax investigations in UK?

’Connect’ is a social network analysis software data mining computer system developed by HMRC that cross-references tax records with other databases.

It is a data matching and risking tool that allows HMRC to cross match one billion HMRC and third-party data items. Hence named ‘Connect’!

Connect identifies “hidden” relationships between people, organisations and data that could not previously be identified.

It was developed by BAE systems for applied intelligence for £45 million in 2009, but in total costs around £100m.

Connect has recovered more than £3bn in taxes since its launch. It uses predictive analytics and has dynamic benchmarking.

It is an extremely powerful software that has triggered more than % of tax investigations.

Connect is run by a team of HMRC specialists in the risk and intelligence service (RIS). About 3,000 staff across HMRC uses Connect.

HMRC states it is using the software to direct resources more effectively, increasing efficiency by improving case selection quality and strike rate for tax investigations.

There are more than 30 different databases available in Connect for analysis although HMRC does not disclose all its sources of information.

From September 2016, Connect has interfaced with financial information from British Overseas Territories known as tax havens.

From 2017 Connect has interfaced with around sixty other OECD countries. Resulting in larger number of HMRC nudge campaigns.

The databases include the following:-

Adverts on the internet e.g. Rightmove and Zoopla.
Tax returns (including VAT, PAYE, income tax and corporation tax returns).
Bank accounts and pensions.
Credit reference agencies.
Credit and debit card accounts.
Online payment providers such as PayPal.
Foreign tax jurisdictions.
Government agencies such as Companies House, the Land Registry and the Border Agency.
Online social networking.
Property websites such as Zoopla and Rightmove.
eBay, Amazon and other internet marketplaces.
Google Street View.
Council tax records.
Gas Safe Register.
DVLA records.
DWP records.
Electoral roll.
Insurance companies.
Charities Commission.
Flight sales and passenger information.

HMRC is looking to the future and exploring the use of new technology such as artificial intelligence (AI) , which will allow Connect to be used to make some of the more sophisticated decisions currently made by HMRC staff.

 

[wellington]

I imagine... the US IRS is the worst... likely to get shot also...

HMRC - had a buddy who worked for them, did hear some stories, safe to say i don't hold pounds, bank in the UK, travel to the UK, so as to ensure there is a massive gap between my British arse and the UK (non-resident).

Having said that the UK will likely have a chat over a cup of tea and settle it like adults, rather than go gun hoe like the IRS.

Was speaking with a friend yesterday who's father did a audit for a friend after HMRC contacted for tax back-payment, by the end of it HMRC told his friend to 'f**k off' as every little loop hole was used to unwind the back-payment lol.

Malicious, I'd say Australia......

Easiest going i'd say some sort of tropical location where fruit readily grows on wild trees...

 

[banafinfodafuggiano]

Indeed.

Just happened to read a thing or two about HMRC, which made me re-evaluate the perceived risk of using nominee services, and here it goes:

What triggers over % of tax investigations in UK?

’Connect’ is a social network analysis software data mining computer system developed by HMRC that cross-references tax records with other databases.

It is a data matching and risking tool that allows HMRC to cross match one billion HMRC and third-party data items. Hence named ‘Connect’!

Connect identifies “hidden” relationships between people, organisations and data that could not previously be identified.

It was developed by BAE systems for applied intelligence for £45 million in 2009, but in total costs around £100m.

Connect has recovered more than £3bn in taxes since its launch. It uses predictive analytics and has dynamic benchmarking.

It is an extremely powerful software that has triggered more than % of tax investigations.

Connect is run by a team of HMRC specialists in the risk and intelligence service (RIS). About 3,000 staff across HMRC uses Connect.

HMRC states it is using the software to direct resources more effectively, increasing efficiency by improving case selection quality and strike rate for tax investigations.

There are more than 30 different databases available in Connect for analysis although HMRC does not disclose all its sources of information.

From September 2016, Connect has interfaced with financial information from British Overseas Territories known as tax havens.

From 2017 Connect has interfaced with around sixty other OECD countries. Resulting in larger number of HMRC nudge campaigns.

The databases include the following:-

Adverts on the internet e.g. Rightmove and Zoopla.
Tax returns (including VAT, PAYE, income tax and corporation tax returns).
Bank accounts and pensions.
Credit reference agencies.
Credit and debit card accounts.
Online payment providers such as PayPal.
Foreign tax jurisdictions.
Government agencies such as Companies House, the Land Registry and the Border Agency.
Online social networking.
Property websites such as Zoopla and Rightmove.
eBay, Amazon and other internet marketplaces.
Google Street View.
Council tax records.
Gas Safe Register.
DVLA records.
DWP records.
Electoral roll.
Insurance companies.
Charities Commission.
Flight sales and passenger information.

HMRC is looking to the future and exploring the use of new technology such as artificial intelligence (AI) , which will allow Connect to be used to make some of the more sophisticated decisions currently made by HMRC staff.

This is unbelievable and dystopian looking.

They want to tax the s**t out of you until you die and AI will be the one that will find you.

 

[Sols]

The ones generally viewed as most effective as the usual suspects: Nordic countries (all of them), US, UK, Germany, Australia, Canada, and to an extent also Japan.

Then we have the mad ones: Spain, France, Italy, China, India, and probably UAE will be in this group by the looks of it. These are highly unpredictable tax authorities that miss a lot of stuff. But when they catch someone, they don't let go until there's no life left. Tax vampires, as opposed to tax police.

 

[Konstanz]

Aggressive in most of places about their own citizens. Unless it's some kind of banana republic who don't have recourse to check tax.

 

[blancmon229]

I imagine... the US IRS is the worst... likely to get shot also...

Lol, true. In reality, they are giving guns to a bunch of kids straight out of high school from what it seems. As if a tax bill is a reason to shoot someone.
In most countries if you don't pay tax it is a civil matter not criminal. All agencies besides for the IRS also do not have the international reach where they can just declare your case a criminal matter and your pretty much fu**ed anywhere you decide to travel to.
Tax liabilities over 70,000 USD can also be referred to DOJ and get your passport revoked. So now you have no way of travelling.
US citizens are also the only people to have citizenship based taxation, where every move they have to file some bulls**t forms and report to the IRS. Hopefully, nobody gets cursed with that citizenship.
So in terms of the IRS, I guess you can't get worse than that.

’Connect’ is a social network analysis software data mining computer system developed by HMRC that cross-references tax records with other databases.

I wouldn't be suprised if most governments have some sort of similar software.

The ones generally viewed as most effective as the usual suspects: Nordic countries (all of them), US, UK, Germany, Australia, Canada, and to an extent also Japan.

Then we have the mad ones: Spain, France, Italy, China, India, and probably UAE will be in this group by the looks of it. These are highly unpredictable tax authorities that miss a lot of stuff. But when they catch someone, they don't let go until there's no life left. Tax vampires, as opposed to tax police.

From personal experience, Swedish tax authoroties are suprisingly effective and precise. Try to save 1 cent and they'll drive you crazy with questions. I don't think I have experienced anything similar to that yet.

 

[Cloudbanck]

From personal experience, Swedish tax authoroties are suprisingly effective and precise. Try to save 1 cent and they'll drive you crazy with questions. I don't think I have experienced anything similar to that yet.

Yeah, Sweden, I mean they take most of your money, but my experience with them is that they are surprisingly competent and helpful. You can call them up, no waiting time, and get to talk to someone who really knows his/her stuff. And if you ask something complicated that they don't know straight away, they will figure it out/escalate and get back to you.

This was years ago though, maybe it has changed, I dont know.

I tried contacting UK tax authorities, and it seems they just give random answers sometimes. You can ask the same basic question multiple times and get different conflicting answers depending on which person you deal with.

And about the US IRS, guess many of us here have decided to deal with them voluntarily by having a US LLC as a "non-resident alien". Doesn't seem so bad when one isnt living in the US, and isnt a US citizen, and doesnt pay tax to the US. Wonder how often the IRS audits LLCs owned by non resident aliens.

 

[getmeout]

Australia's pretty bad in terms of the actual laws. Some of them are vague and open ended which leave you at the mercy of the person interpreting it. However you can contest it and if you've done nothing wrong, you're likely to win. What's scary about this is you can be doing nothing wrong but theoretically someone at the ATO dislikes you for whatever dumb reason and decides to put you through hell going to court in the first place. Where you will likely win, but what if you don't.

I trade shares for a living and my data is automatically sent to them when it comes time to do a tax return. I believe almost all data within Australia is automatically sent to them and "prefilled".

For me personally I'm not too worried about the tax office, even though they are unethical I don't think it's like the stories I've read about spain and italy on here. What is far more terrifying in Australia is the family court, who has the power to declare your friend with benefits as having the same rights as your wife. The court has unreasonable powers and discretion to determine what is "fair" and it becomes even more vague than the tax office. The ATO looks reasonable by comparison. There's some shocking court judgements out there and many lives ruined anecdotally you'll hear about from this. The issue is that the laws are not set in stone and leave it to the personal discretion of persons who may or may not have bias.

Just sharing incase anyone was considering Australia. Don't!

 

[jafo]

The court has unreasonable powers and discretion to determine what is "fair" and it becomes even more vague than the tax office. The ATO looks reasonable by comparison. There's some shocking court judgements out there and many lives ruined anecdotally you'll hear about from this. The issue is that the laws are not set in stone and leave it to the personal discretion of persons who may or may not have bias.

From my personal experience reading court opinions and court transcripts, instead of books of fiction, over decades has brought me to the painful realization that ALL systems of government are this way! No exceptions!

As Supreme Court Justice Robert Jackson (1941-54), who also served as chief U.S. prosecutor at the Nuremberg war crimes trials at the conclusion of World War II, wrote in Brown v. Allen, 344 U.S. 443 (1953) :
"We are not final because we are infallible,
but we are infallible only because we are final."

 

[BarleyMalt]

Indeed.

Just happened to read a thing or two about HMRC, which made me re-evaluate the perceived risk of using nominee services, and here it goes:

What triggers over % of tax investigations in UK?

’Connect’ is a social network analysis software data mining computer system developed by HMRC that cross-references tax records with other databases.

It is a data matching and risking tool that allows HMRC to cross match one billion HMRC and third-party data items. Hence named ‘Connect’!

Connect identifies “hidden” relationships between people, organisations and data that could not previously be identified.

It was developed by BAE systems for applied intelligence for £45 million in 2009, but in total costs around £100m.

Connect has recovered more than £3bn in taxes since its launch. It uses predictive analytics and has dynamic benchmarking.

It is an extremely powerful software that has triggered more than % of tax investigations.

Connect is run by a team of HMRC specialists in the risk and intelligence service (RIS). About 3,000 staff across HMRC uses Connect.

HMRC states it is using the software to direct resources more effectively, increasing efficiency by improving case selection quality and strike rate for tax investigations.

There are more than 30 different databases available in Connect for analysis although HMRC does not disclose all its sources of information.

From September 2016, Connect has interfaced with financial information from British Overseas Territories known as tax havens.

From 2017 Connect has interfaced with around sixty other OECD countries. Resulting in larger number of HMRC nudge campaigns.

The databases include the following:-

Adverts on the internet e.g. Rightmove and Zoopla.
Tax returns (including VAT, PAYE, income tax and corporation tax returns).
Bank accounts and pensions.
Credit reference agencies.
Credit and debit card accounts.
Online payment providers such as PayPal.
Foreign tax jurisdictions.
Government agencies such as Companies House, the Land Registry and the Border Agency.
Online social networking.
Property websites such as Zoopla and Rightmove.
eBay, Amazon and other internet marketplaces.
Google Street View.
Council tax records.
Gas Safe Register.
DVLA records.
DWP records.
Electoral roll.
Insurance companies.
Charities Commission.
Flight sales and passenger information.

HMRC is looking to the future and exploring the use of new technology such as artificial intelligence (AI) , which will allow Connect to be used to make some of the more sophisticated decisions currently made by HMRC staff.

Deleting your social media account where you post pictures of you and your life should be the tax advice most people here follow, whatever the jurisdiction they live in.

 

[jafo]

Deleting your social media account where you post pictures of you and your life should be the tax advice most people here follow, whatever the jurisdiction they live in.

#This #FACT #Bingo!

A former college workout buddy who now works at a 3-letter agency joked a few years ago: "We have so many leads now, because every "friend", foe, or butthurt relative sends us social media links of the people they envy whose lifestyle doesn't coincide with their reported income. It's all there transcribed to us. We don't even need to pay to transcribe anything."

 

[saintjohnny]

And about the US IRS, guess many of us here have decided to deal with them voluntarily by having a US LLC as a "non-resident alien". Doesn't seem so bad when one isnt living in the US, and isnt a US citizen, and doesnt pay tax to the US. Wonder how often the IRS audits LLCs owned by non resident aliens.

Aside from from making sure that forms 5472 + 1120 are filed correctly (and fining you $25k if they aren't)...

What else could the IRS claim to a "non resident alien"? Provided that this NRA uses the LLC for a legit business that is not effectively connected to the US (e.g. consulting to US clients), and doesn't live in the US, or spends much time there?

I honestly cannot think of anything, but who knows.

 

[blancmon229]

Aside from from making sure that forms 5472 + 1120 are filed correctly (and fining you $25k if they aren't)...

What else could the IRS claim to a "non resident alien"? Provided that this NRA uses the LLC for a legit business that is not effectively connected to the US (e.g. consulting to US clients), and doesn't live in the US, or spends much time there?

I honestly cannot think of anything, but who knows.

For a non resident alien there is less to worry about in my opinion if you have 0 connection to the US besides for the LLC.

But, I would add that if you ever publicly get in trouble(in the news etc...) don't be suprised if they will use the LLC to make the effective connection to the US, so that they can get a piece of the prosecution.

 

[saintjohnny]

For a non resident alien there is less to worry about in my opinion if you have 0 connection to the US besides for the LLC.

But, I would add that if you ever publicly get in trouble(in the news etc...) don't be suprised if they will use the LLC to make the effective connection to the US, so that they can get a piece of the prosecution.

That’s tinfoil hat territory.

 

[zzzzzz]

This is unbelievable and dystopian looking.

They want to tax the s**t out of you until you die and AI will be the one that will find you.

It's funny how HMRC sees their mission of tax parasitizing with advanced technology, as high added value to society.

 

[jafo]

That’s tinfoil hat territory.

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[Radko]

Spanish "Hacienda" is the devil .
Tax Agents get compensated just to file a claim, even if later on nothing happens (approximately 52% of the lawsuits don't get anywhere if you go to court,) but they will try to get you by threatening you with jail time. Then you can decide if you want to pay or if you want to go to Court and fight your case (most people pay.)
They don't care if they are destroying your life, they want your money, as much if it as possible.