VATupdate Newsletter Week 36 2022

Do you know the most surveilled spot on the earth is? No, it’s not Time Square in New York. Nor is it London, UK, even though that city has 127,373 cameras for 9,540,576 people = 13.35 cameras per 1,000 people. It’s the border between the US and Mexico. To be more precise: the Sonoran Desert in Arizona, USA.

Interesting story about the Sonoran Desert, AZ, HERE (just click, even if it’s just for the great picture on the front page)

Even though the border is so heavily guarded, there are still immigrants illegally crossing the border. Which, to me, is a message to all the tax authorities that want to increase the real-time reporting by businesses: you will not close the VAT-gap with more surveillance!

Of course it helps. Making it more difficult to hide transactions or commit fraud will obviously ensure that more people are caught, and that less people will try to misbehave. But there will always be criminals that will either not follow the rules, or who will find ways to ‘mess with the system’.

We believe that the criminal organisations that commit VAT fraud, will always ensure that their paperwork is perfectly in order. All invoices meet the VAT invoicing requirements, their companies are existing and have a valid VAT registration number, and the logistics documents are flawless. The only thing they don’t do, is pay VAT to the government. Or only a small part. And when the tax authorities find out what’s going on, ‘the birds have flown’, as the Dutch saying goes.

The companies that are suffering from the strict rules, are the companies that are doing their best to be compliant. They just want to follow the rules as best as they can, but with the requirements becoming stricter and changing all the time, it’s sometimes hard to keep up.

Back to surveillance. Cities in China are under the heaviest CCTV surveillance in the world. But not only in China: people are followed by more than 1 billion surveillance cameras worldwide. Do they really help? Although some television series make you believe differently (e.g. detectives regularly find the suspect via the home-video system that is installed in hotels, bars, etc.), in the real world there does not seem to be a large correlation between the number of public CCTV cameras and crime or safety.

We recommend that you, as a business, make sure you’re doing it right, and that you check all your suppliers and customers before doing business with them. If a deal is too good to be true, check if they are legitimate.

There are enough examples on VATupdate.com of case law where VAT fraudsters are captured and jailed. Or even beheaded for issuing wrong invoices, as can be read in this article HERE (which was way before VATupdate existed, so you can’t find it back on our site).

If you have any comments, questions, or ideas that you want to share with us, please send us an email at [email protected] or leave a comment under the posts of this newsletter on LinkedIn.

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