Tax authorities and financial aspects of THB for labour exploitation
The most important aspect in the process of THB for labour exploitation for tax authorities is the financial aspect. Human trafficking perpetrators are mainly motivated by financial gains. THB for labour exploitation is a very profitable and lucrative business for criminals. A more effective use of financial investigations in THB cases is necessary to take away the criminal proceeds, since this will hurt the criminals the most.
When it comes to the financial aspects of THB for labour exploitation, tax authorities could:
Look for signs during checks of the wages administration and inspections of companies
Tax authorities may come across signs of THB for labour exploitation. For example, when they are checking the wages administration for payment of payroll taxes and social security premiums. The wages administration contains information on the hours that have been worked, on wages and other payments. It also shows how these have been paid. Sometimes it also gives information on the accommodation of the staff.
During visits or inspections of companies, tax inspectors can ask the workers about their employment and duties. They can establish the identity of the workers by checking their identity cards. This could all lead to detecting signs of THB for labour exploitation, which tax authorities could share with the relevant criminal investigation service.
Share information to be used during criminal investigations
Tax authorities have a lot of information on for example: places of residence; ownership of real estate; ownership of cars, motorbikes and ships; income; bank accounts; turnover and personnel of companies. They also have information that has been collected during earlier inspections. Tax authorities can compare tax declarations with those from other businesses in the same economic sector, to see if the tax declarations are correct. This information may be very useful to criminal investigators that are looking into THB for labour exploitation. Tax authorities could therefore consider sharing this information with them.
Calculate how much the victim should have been paid and how much the trafficker earned
Based on testimony of the victim and on other evidence about the hours they worked, tax authorities can calculate how much salary is still owed to the victim. Tax authorities can also calculate how much the traffickers spent on real estate, cars, boats and the costs of living. That way, they can estimate how much money the trafficker earned in total.
These calculations can be of use during the prosecution of the traffickers. They can ensure that the assets of the trafficker are seized and the victim is given compensation. The calculations can of course also be used to collect the taxes that are due on the money earned.
General information about the process
The Dutch authorities apply the so-called barrier model to these six aspects of THB for labour exploitation.