Tax authorities in Australia, Canada, France, the United Kingdom and the United States have conducted a joint investigation into “electronic sales suppression software.” This is an application that falsifies point-of-sale information to help sellers avoid paying taxes on their actual earnings.
Friday announcement [PDF] The Joint Chiefs of Global Tax Enforcement (known as J5) say their investigation has resulted in “five arrests in the UK on suspicion of designing and selling electronic sales suppression systems internationally.”
These tools allow retailers to maintain separate books of accounts and launder money in a single transaction.
Those responsible allegedly began exporting goods during the COVID-19 pandemic.
“These dangerous sales deterrence tools allow retailers to keep separate books and launder money in a single transaction,” said J5 Chief and Australian Taxation Commissioner John J. Ford explained.
“They hide this income and transfer it anonymously, sometimes offshore.”
“So if a customer orders a $60 steak and $100 wine, and the software modifies the transaction so that it is recorded in the POS system as ‘$10 tip and $100 bowl,’ Ford explained. One $4 soft drink. ”
Such hoaxes are obvious to customers, who still pay full price. But the retailer ended up recording $14 in revenue for him and $146 in laundry.
J5’s statement on its investigation alleges that ESS originated in the United Kingdom, after which prankware developers exported it to the United States and elsewhere.
“This was a highly sophisticated and truly global attack on the international tax system.” The group is suspected of allowing thousands of businesses to evade taxes in a large-scale, technologically-enabled fraud.”
York added: “This is just the beginning of our work in this area and we are already looking at other questionable suppliers. We encourage all users of this kind of system to contact them. We urge you to contact us in advance.”
Australian authorities have raided 35 facilities suspected of supplying and using software.
Ford also suggests that the sales containment technology will be sold “as hardware that connects to POS systems, as cloud-based software, and as features built directly into the software.”
J5’s tax authorities are currently investigating the records of known or suspected users of these technologies, and the group’s statement on that investigation also includes routine citations from the Dutch tax authorities. Dutch institutions say they are growing interest in cryptocurrencies and virtual assets and are investing in more technologically sophisticated methods to track down fraudsters.
J5 and other tax authorities are committed to continuing action against the sources and users of these tools. ®
