Tackling undeclared work database

  Undeclared work accounts for about half of the total tax gap in Sweden and the country has taken important measures to tackle undeclared work, especially in sectors such as commerce, construction and other sectors with high cash turnover. To tackle VAT fraud and undeclared work in the construction industry, the government introduced a law on reverse charge VAT effective from 1 July 2007. The reverse charge means that the buyer becomes liable for the payment of VAT.  

  In January 2007, the Swedish government implemented a law on obligatory staff registration for those working in restaurants and hairdressers. The law allows the National Tax Agency to conduct unannounced inspections at workplaces to determine if employers are registering their staff in the correct manner. The National Tax Agency estimates that about 4,200 previously undeclared instances of employment have become legal through the implementation of staff registers. In 2009, plans are underway to implement the successful law in other sectors also.