Tax fraud

Publication date 28-02-2025, 11:06 | Last update 28-02-2025, 11:07

Undeclared savings, VAT fraud and concealing income from the Netherlands Tax Authority. These are all examples of tax offences or tax fraud. The FIOD traces offenders together with institutions such as the Netherlands Tax Authority, Customs and the Benefits Department.

What is tax fraud?

Tax fraud has many forms. Such as:

• VAT (carousel fraud): an entrepreneur does not pay VAT to the Netherlands Tax Authority but does charge that VAT or deducts the unpaid VAT. Carousel fraud concerns fraud in a chain whereby goods are sold on repeatedly and VAT is charged; the buyer deducts the paid VAT as input tax although the seller does not pay it. Sometimes, it goes round, hence the name ‘carousel’. The distinctive feature is that the chain includes one or more international transactions.
• unexplained spending: someone purchases real estate, cars, art or other expensive goods while, according to the tax return, they would not be able to afford those purchases. This indicates undeclared income.
• persons with undeclared savings: people who do not, or do not fully, declare their savings in their annual tax return;
• concealing structures: people who conceal their ownership of companies by placing them, via (trust) structures, in countries where concealing assets is still possible.
• fraud with wage tax and national insurance contributions through paying out undeclared wages.

What does the FIOD do to fight tax fraud?

The FIOD mainly investigates individuals and companies that enable others to commit fraud. They are also called facilitators. In consultation with the Tax Authority, the FIOD determines what types of fraud receive extra attention.  For an overview of government authorities collaborating against fraud, see rijksoverheid.nl.

International collaboration

Some forms of fiscal fraud partly take place abroad. For example, individuals with undeclared savings who try to conceal money in a foreign bank account from the Tax Authority. Therefore, the FIOD collaborates with partners all over the world. An example is the Joint Chiefs of Global Tax Enforcement (J5). In J5, the FIOD works together with the fiscal investigation services of:

• Australia
• Canada
• United Kingdom
• United States