Dividend Tax Fraud: Raising Awareness of Dividend Stripping Schemes
Dividend stripping is a type of fraud that is committed through a complex mechanism of trading, selling and repurchasing shares over a certain period to unlawfully avoid payment of dividend taxes, or to claim unjustified tax reimbursements. Dividend stripping in its many forms poses a great challenge to the tax bases of numerous jurisdictions and may create market distortions that corrode the integrity of the financial system. This report is intended to raise awareness of dividend stripping frauds and provides a number of recommendations for countries around recognising the risk, improving domestic co-ordination and expanding international co-operation. In particular, tackling dividend stripping requires strong domestic inter-agency co-ordination and international co-operation, as well as the sharing of information between jurisdictions. Countries may therefore wish to prepare targeted actions and comprehensive strategies against this phenomenon, including not only tax administrations and law enforcement, but also financial regulators and supervisory authorities, as well as anti-money laundering competent authorities. Legislative changes may also be required in some cases.
Enhancing Inter-Agency Trust between Tax and other Financial Crime Authorities: Pilot Inter-Agency Trust Maturity Model and Trust Perception Survey
This report includes two new pilot tools for enhancing inter-agency trust and whole-of-government approaches. These are the Inter-Agency Trust Maturity Model, which is a tool for jurisdictions to self-assess the level of maturity of their practices and processes for achieving and maintaining inter-agency trust, and the Inter-Agency Trust Perception Survey, which is intended to help tax and other financial crime authorities understand how they perceive each other and whether they need to work further to improve perceptions and trust. The Task Force on Tax and Crime Secretariat and the South African Revenue Service prepared this publication. In addition to being available to any jurisdiction to use as it sees fit, it will be used as part of the Tax Inspectors without Borders for Criminal Investigation programmes. Following the pilot, the maturity model and survey will be revised as appropriate and the publication will be updated.
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