Unified Metrics Library - Tax investigations
Helper question
Has the company been involved in any tax related lawsuits or offenses
investigated by a judicial/regulatory process, during the period?
Summary
Companies have an obligation to comply with tax legislation and a responsibility to their
stakeholders to meet expectations of good tax governance.
Unit
Boolean: Yes or No
Description
The organization’s tax compliance and transparency, as well as its exposure to tax risks and liabilities, are evaluated by this indicator. It requires the organization to disclose any scrutiny or challenges from tax authorities or courts regarding its tax affairs during the reporting period.
Regulatory Definition
Tax fraud is a form of deliberate evasion of tax which is generally punishable under criminal law. The term includes situations in which deliberately false statements are submitted or fake documents are produced.
Sources
- Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council of 11 September 2013 concerning investigations conducted by the European Anti-Fraud Office (OLAF) and repealing Regulation (EC) No 1073/1999 of the European Parliament and of the Council and Council Regulation (Euratom) No 1074/1999
- Council Directive (EU) 2016/1164 of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market
Examples
A taxpayer may underreport their income, overclaim their deductions, use a fake identity, or hide their assets in offshore accounts.