The OECD issued the Tax Administration 2015 report on 11 August 2015. This report contains data from a survey of 56 tax administrations in industrialized and emerging economies and analyses the latest trends and best practice within tax authorities. All EU, OECD and G20 countries are included in the survey.

The survey indicates that tax administrations are changing their organization to include new activities while some are amalgamating with other government bodies or consolidating their work. Many administrations are having to cope with reductions in staff numbers as a result of the requirement to cut administrative costs. As a result of this tax administrations are looking at ways of using third party service providers to take over some important administrative functions such as information technology (IT) support.

Digital services

Tax administrations are investing in digital services to improve the customer experience and increase productivity. Some tax administrations are making available further online services to taxpayers and intermediaries including online filing, third party data capture and integrated taxpayer accounts.

Electronic filing is offered by 95% of the tax administrations in the survey and in the majority of these the usage of electronic filing is more than 75%. The OECD considers that currently not enough is being done to add other functions such as assessment and payment of tax into an integrated service for taxpayers.

Outstanding tax debts

Although the aggregate tax debt for OECD countries has risen slightly in the past few years this increase is due to a few outliers such as Greece and the evidence from most of the countries shows that tax collection has generally improved. Generally the improvements are due to strong management information systems; advanced analytical tools to guide the use of enforcement powers; use of tax withholding at source; the use of electronic payment methods and investment in IT services.

Tax intermediaries

Many of the tax administrations in the survey did not have regulations in place with regard to tax intermediaries and did not have provisions for consultation with representatives of tax intermediaries on relevant issues. The OECD considers that there are further opportunities for tax administrations to improve taxpayer compliance by engaging more with tax intermediaries.

Large taxpayers

Typically, a small number of large taxpayers may be the source of a large amount of tax revenue collected by an administration. Large taxpayers present challenges relating to the complexity of their business, their use of professional advisers and major compliance risks from tax minimization strategies and offshore activities.

Of the countries surveyed more than 85% were following the cooperative compliance model for managing large taxpayers as recommended by the OECD. The survey suggests that the scale of activities of large taxpayer units varies widely, depending on the definition used to identify large taxpayers and on the scope of the responsibilities of the large taxpayer units.

High net worth individuals

In around a third of the countries a cooperative compliance model is also being used for dealing with high net worth individuals. However the OECD considers that in view of the increase in the numbers and wealth of high net worth individuals in recent years not enough tax administrations have set up specialist units to deal with their tax affairs.

Strategic plans

More than 90% of the tax administrations surveyed by the OECD issue strategic plans in which the main compliance risks are identified and prioritized. The compliance risks most commonly identified by the countries surveyed were revenue risks from corporate profit shifting and transfer pricing, VAT fraud, non-compliant hidden economy activities, tax avoidance schemes and non-payment of tax debts.

To combat these risks tax administrations are adopting a cooperative compliance model for large taxpayers, random tax audits for risk profiling and compliance research and the use of bulk VAT invoice data for risk profiling and detection of non-compliance.

Measuring the tax gap

Increased attention is being paid to tax gap measurement. The tax gap is the difference between the amount of tax that should be assessed and the amount that is actually being assessed.

Although there are some doubts surrounding the accuracy and usefulness of the tax gap measurements there is more interest in measuring the revenue leakage from non-compliance, especially for VAT. The UK and Danish tax administrations in particular have performed extensive research in the area of tax gap estimation methodologies. More than 40% of the countries surveyed were researching ways to estimate the tax gap for at least some of the taxes they administer.

Use of disclosure policies

Although more than two-thirds of the countries surveyed have provisions in their tax law permitting voluntary disclosures, less than half the countries have implemented policies to encourage taxpayers to use the voluntary disclosure facilities. The OECD is expecting countries to be showing greater interest in voluntary disclosure programs as implementation of the automatic exchange of financial account information draws closer.