The latest in global tax fraud and what it means for agencies placing contractors 

Global tax fraud recruitment agencies

15th December 2022

As we approach the festive period, changes in the global tax and compliance market show no sign of abating. The past few years have seen a range of new laws put in place around the world that are designed to curb fraud and tax abuse by multinational organisations and individuals suspected of evasion. While some of these shifts may seem like they’re unrelated to your business, if you place contractors in international roles, they most likely will have an impact. Since the introduction of the Criminal Finances Act in 2017, agencies placing professionals now hold much of the tax burden and are responsible for the compliance (or non-compliance) of the people they work with. This means it’s never been more important to stay up to speed with legal shifts, particularly in jurisdictions that you’re not familiar with. We’ve highlighted some of the latest news and legal cases from around the world that agencies should be aware of.


Banks are leaving the Caribbean, however authorities are warning this could lead to an increase in corruption and tax fraud


Firms working in the Caribbean may have noted there has been a significant trend of banks and other institutions ‘de-risking’ in the area. Put simply, this means these groups are judging the risks of operating in the region as outweighing the potential benefits, and are divesting their operations here. The move is rooted back to the blacklisting of many of the small island developing states by bodies including the Financial Action Task Force, the Organisation for Economic Development and, more recently, the EU commission. However, despite this being a supposedly well-advised move, many analysts have warned that the de-risking is leading to an increase in money laundering, fraud and the financing of terrorism, exactly what many governments moved to avoid. It has also led to a much more complex trade environment, particularly for SMEs in the region and the firms that work with them. And perhaps most damagingly, it has driven stagnated economic growth in a part of the world that’s still dealing with Covid and is exposed to the forefront of the climate crisis, with the international financial centres and institutions that do remain here facing increased challenges in day-to-day operations.


Considering the extent of money laundering and financial crimes that have been taking place in Europe, the extreme pressures placed on Caribbean economies are potentially misplaced and could actually be creating more issues than they are solving. If you place talent in the Caribbean or work with firms with operations here, it’s certainly worth keeping a close eye on the this rapidly changing market.



An Indian analytics firm is using ‘eyes in the sky’ technology to tackle property related tax evasion


Elixir AI, is moving the fight against tax evasion into the 21st century, and potentially beyond, by utilising its ‘eyes in the sky’ technology to tackle property related fraud in India. The country suffers from high levels of tax evasion at both individual and corporate level with property being one of the most heavily impacted areas. Elixir’s technology leverages geo-spatial techniques, satellite images and next-gen algorithms to provide solutions to the Government and some private sector firms. The solutions include going through property records and determining unassessed taxable properties for municipal corporations and tax departments using GIS mapping, satellite imagery, and AI-based image recognition.

The work uses satellite images to identify buildings. Latitudes and longitudes are used to derive the addresses of these buildings with the addresses being matched with the city’s database to identify if they have been assessed for tax or not, helping to track the development of illegal new buildings.

This has helped tax authorities to draw in increased revenue and boost their tax base. So far, Elixir’s work has helped to identify over 10,000 new properties and brought in hundreds of thousands in tax revenue. If your agency places specialists in India, or works with firms within the property and built environment industries, it’s well worth monitoring the latest legal developments and ensuring your operations are fully compliant before it’s too late. It’s not just the tax authorities monitoring developments here, now AI systems are too.

What do VAT law changes in the UAE mean for businesses operating here?


In September the UAE Government implemented a number of changes to its VAT legal system, leaving many firms operating here struggling to maintain compliance with the new legislative landscape. The most important changes relate to the amount of time for the Federal Tax Authority (FTA) to raise a tax audit or issue an assessment. The changes can be read in full here. However, we’ve outlined a summary below for agencies working here to be aware of:


  • The FTA can undertake a tax audit, or issue a tax assessment more than five years after the end of a tax period, if they notify the taxpayer of a tax audit before the end of the five-year period, and either complete the audit or issue a tax assessment within four years from the date they notified the taxpayer of the tax audit.


  • The 15-year period for non-registration or tax evasion still applies.



  • There are also changes to increase the time period for the FTA to raise a tax audit when a voluntary disclosure is made.


  • Under the VAT Amendment Law, the FTA can conduct a tax audit more than five years after a tax period where a taxpayer submits a voluntary disclosure in the fifth year from the end of the period, provided that the tax audit is completed or the tax assessment is issued within one year from the date of submission of the voluntary disclosure.


  • In addition, a voluntary disclosure can no longer be made after five years from the end of a period.


‘Get your taxes in order’ – IRS warns crypto investors ahead of major probe


And finally, the US Internal Revenue Service has issued a warning to all crypto investors that it is doubling down its fight against tax evasion within the field with chief Jim Lee saying it is ‘preparing hundreds of cases’ in the coming months. Many of the cases involve ‘off-ramping’ in which investors have failed to declare exchange of crypto into traditional currencies. Other cases involve professionals being paid for their services in crypto currency and then failing to report their income. While this field is relatively new, that’s still no excuse for not understanding the implications of breaking financial laws and any agencies working with specialists in this space, or who have been paid in cryptocurrencies, should be aware of the implications of this announcement.


If your agency is concerned about its compliance status, or the status of the contractors you work with, then don’t take any risks – whether that’s with traditional tax laws, or new crypto-based ones. As you can see, governments around the world are ramping up their fight against non-compliance and will crack down on any alleged fraud or illegalities that they can identify.


6CATSPRO is part of WorkwellTM Group

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