Back duty refers to an amount of tax that should have been paid in previous years but was not due to the taxpayer’s failure to disclose full income details to HM Revenue. An inspection and enquiry process reveals these unpaid taxes, often attracting interest and penalties.
A security for which ownership is determined solely by possession of the physical certificate, allowing for anonymous transfer and posing risks for illegal activities like money laundering and tax evasion.
Carousel fraud is a type of criminal scheme commonly involving cross-border transactions within the European Union (EU), where fraudsters exploit the VAT system to steal large amounts of money.
A frivolous tax position is one that is knowingly advanced in bad faith and is patently improper, often with the intent to delay or avoid tax obligations without any legitimate basis.
Illegal income refers to earnings derived from activities that are against the law, such as theft or embezzlement. These earnings are considered taxable income and must be reported to tax authorities.
An intricate VAT fraud in which individuals or businesses claim repayment of VAT on the export of goods to fictitious purchasers in other EU countries. Involves a complex trail of transactions across multiple member states.
Transactions that are concealed from formal accounting records to avoid taxation or government regulation, often referred to as 'off the books' transactions, can occur in the form of cash payments or barter trades.
Round tripping refers to various practices where a company engages in transactions that ultimately return to their point of origin, often with manipulative intent. This can include selling and rebuying assets or borrowing and lending money, typically for purposes like money laundering, tax evasion, or inflating financial figures.
A transaction intended to create the appearance of rights and obligations different from the actual intended agreements to deceive other parties, often tax authorities.
A shell corporation is a company that is incorporated but has no significant assets or operations. It may serve legitimate purposes, such as obtaining financing, but can also be used in fraudulent schemes.
Skimming can refer to either an illegal practice of failing to account for some sales or a marketing strategy involving high initial pricing for new products.
Tax evasion is the illegal act of deliberately misrepresenting or not reporting income to reduce tax liabilities. This practice involves concealing income, inflating deductions, or using deceptive methods to evade tax obligations.
Minimizing tax liabilities illegally, typically by not disclosing taxable income or providing false information to tax authorities. It contrasts with tax avoidance, which is the legal practice of reducing tax liabilities through lawful means.
Tax harmonization refers to the process of making tax systems more compatible across different jurisdictions, typically to minimize differences in tax bases and tax rates. This process aims to reduce tax competition and prevent tax evasion while fostering economic integration. However, it often faces resistance as it can limit the fiscal autonomy of individual governments.
A tax haven is a country or jurisdiction with very low 'effective' rates of taxation for foreign investors. It may also refer to those providing the services.
A tax loophole is an ambiguity or omission in the tax code that allows individuals or corporations to reduce their tax liabilities legally. These loopholes are often the result of complex tax laws and can be used to advantage through strategic financial planning.
Tax treaties are agreements negotiated between two or more countries to avoid double taxation of income earned in one country by residents of another and to prevent tax evasion.
Under-reporting is the improper failure to report accurate income on a tax return, leading to potential legal and financial consequences.
The underground economy comprises economic activities that go undetected by taxing authorities, often involving barter or cash transactions. These activities include both illegal operations and those that would be legal if recorded.
Unreported income refers to the improper failure to include certain income on a tax return. This can have significant legal repercussions, including penalties, interest, and criminal charges.
