Skatteetterskap

Skatteetterskap is a Norwegian term commonly used to describe tax evasion, the illegal act of avoiding taxes owed to the state. It encompasses underreporting income, inflating deductions or credits, hiding assets, or engaging in fraudulent schemes designed to reduce tax liability. It is distinguished from legal tax avoidance or planning, which uses permitted methods to minimize taxes.

Legal framework: In most jurisdictions, tax evasion is a criminal offense. Prosecution is typically by police and public prosecutors, while tax authorities conduct audits and investigations. Penalties vary but commonly include repayment of unpaid taxes with interest, fines, and, in serious cases, imprisonment. Civil penalties and reputational consequences can also apply. In Norway, Skatteetaten (the Norwegian Tax Administration) leads detection and enforcement, with evasion cases potentially pursued under tax laws and penal provisions.

Common methods: cash-intensive operations, falsified invoices, misclassification of income or expenses, offshore accounts, shell companies, and transfer pricing manipulation. The growing use of cross-border arrangements has increased the complexity of enforcement, prompting international cooperation and information sharing.

Enforcement and policy: Tax administrations pursue deterrence through audits, penalties, and public disclosures. Policy responses focus on closing loopholes, improving reporting requirements, and increasing transparency of ownership and financial flows. International initiatives, such as BEPS and automatic information exchange, aim to reduce cross-border evasion.

Impact: Tax evasion undermines government revenue, distorts competition, and erodes trust in the tax system. It is generally pursued vigorously by authorities, with ongoing reforms to strengthen detection and sanctions.

See also: tax avoidance, tax compliance, tax fraud, transfer pricing, BEPS.