Tax administration: detecting corruption

 

CleanGovBiz handbook banner 160 pixels

Full text of the guidance
(pdf, 590KB)

Tax policy is often used to encourage or discourage certain behaviours and countering corruption is no exception. Similarly, tax administrations are increasingly involved not only in enforcing tax measures but also in the detection of possible crimes, particularly financial crimes. 

 

Why? Tax examiners are highly trained financial investigators and thousands of tax inspectors around the world routinely examine the financial affairs and transactions of millions of individuals, companies, partnerships, trusts, foundations and other taxpayers in the course of tax audits or other tax administration activities. They are thus ideally placed to detect and report suspicions of criminal activity such as payments of bribes to the appropriate authorities.

 

Countries have taken a range of tax related measures to strengthen both the legal framework and the practical administrative efforts to counter corruption.  Where possible, a multi-agency approach to fight tax crimes, bribery and other crimes is an efficient option.       

 

Priority checklist

The combined effect of these tax policy and administration steps is increased deterrence, detection, reporting and prosecution of corrupt activities.

 

1. Do tax systems explicitly disallow tax deductions for bribes to public officials?


2. Do tax administrations raise awareness among taxpayers that bribes are not deductible? Is this message disseminated through regular contacts with tax advisors and accountancy firms, through the organisation’s website or other communications tools?


3. Do tax authorities include corruption in their risk assessment and audit processes and encourage tax examiners to carry out relevant compliance checks?


4. Do tax administrations provide guidance and training to tax examiners as to the types of payments that are deemed to constitute bribes and the actions to take when they suspect a bribe has been paid?


5. Are tax authorities authorised to report suspicions of corruption to the appropriate domestic law enforcement authorities?


6. Do tax administrations provide guidance to tax examiners to facilitate reporting of suspicions of foreign bribery arising out of the performance of their duties to the appropriate domestic law enforcement authorities?


7. Do tax treaties allow the use of information provided by a treaty partner for tax purposes to combat serious crimes such as corruption under certain circumstances?


8. Do tax authorities use tax information sharing agreements with other countries to obtain and provide information to determine whether a deducted payment constitutes a bribe? 

 

 Download the full text of the guidance (pdf, 590KB)

 

  

INSTRUMENTS AND STANDARDS

OECD Recommendation on the Tax Deductibility of Bribes to Foreign Public Officials

2009 Council Recommendation on tax measures for further combating bribery of foreign public officials in international business transactions

OECD Recommendation to Facilitate Co-operation between Tax and Other Law Enforcement Authorities to Combat Serious Crimes

OECD Anti-Bribery Convention

 

TOOLS, GUIDANCE, MANUALS

Bribery Awareness Handbook for Tax Examiners

Money Laundering Awareness Handbook

Global Forum on Transparency and Exchange of Information for Tax Purposes

Exchange of Tax Information Portal

 

REVIEWS, CASE STUDIES

Country reviews and bilateral agreements on Exchange of Tax Information Portal

Country reports on implementation of the Anti-Bribery Convention