Tax and Crime

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Tax crimes, money laundering and other financial crimes can threaten the strategic, political and economic interests of both developed and developing countries. They also undermine citizens’ confidence in their governments’ ability to get taxpayers to pay their taxes and may deprive governments of revenues needed for sustainable development.

These activities all thrive in a climate of secrecy, inadequate legal frameworks, lax regulation, poor enforcement, and weak inter-agency co-operation. Conduct involving money laundering, corruption or other economic crimes typically also constitutes a tax crime. Countering these activities requires greater transparency, more strategic intelligence gathering and improved efforts to harness the capacity of different government agencies to work together to detect, deter and prosecute these crimes (a whole of government approach).

The Launch of the Oslo Dialogue

These issues were discussed by more than 150 delegates from 54 delegations who participated in the first tax and crime conference on 21-23 March 2011 hosted by the Norwegian government. The conference brought together representatives from a range of OECD and non-OECD governmental agencies, including Tax Administrations, Finance and Justice Ministries, Financial Intelligence Units, Central Banks, FATF, International Organisations, as well as business and NGOs.

Tax crime and Money laundering

There are substantial similarities between the techniques used to launder the proceeds of crimes and to commit tax crimes. In May 1998 the G7 Finance Ministers encouraged international action to enhance the capacity of anti-money laundering systems to deal effectively with tax related crimes. The G7 considered that international action in this area would strengthen existing anti-money laundering systems and increase the effectiveness of tax information exchange arrangements. In this regard the OECD's Committee on Fiscal Affairs has established a dialogue with the Financial Action Task Force and continues to examine ways of improving co-operation between tax and anti-money laundering authorities. Joint workshops with tax and anti-money laundering officials have been held allowing experts to share experiences on some of the practices that are common to both tax evasion and money laundering. OECD work on tax crime and money laundering is designed to complement that carried out by FATF (add link to FATF site). In 2010 the OECD adopted a new OECD Recommendation to facilitate cooperation between tax and other law enforcement authorities to combat serious crimes.

Tax and Corruption

Corruption threatens good governance, sustainable development, democratic process, and fair business practices. The OECD is a global leader in the fight against corruption via the Anti-Bribery Convention, taxation, governance, export credits and development aid. Legislation denying the tax deductibility of bribes is an important deterrent to bribing foreign public officials and tax officials can play a significant role in detecting bribes. In 2009 the OECD adopted a new Recommendation to further strengthen the role of tax authorities in the combat against bribery. Read more.

Documents

Our related documents include:

• Money Laundering Awareness Handbook for Tax Examiners and Tax Auditors (Oct 2009)
• Report on Abuse of Charities for Money-Laundering and Tax Evasion 
• Report on Real Estate Sector - Tax Fraud And Money Laundering Vulnerabilities
• Report on Identity Fraud: Tax Evasion and Money Laundering Vulnerabilities

In addition the Committee has produced a survey of country practices on access for tax authorities to information gathered by anti-money laundering authorities, which has recently been updated and sets out the ability of tax officials to obtain information from anti-money laundering authorities at the national level.