IDEAS home Printed from https://ideas.repec.org/a/kap/empiri/v52y2025i3d10.1007_s10663-025-09654-2.html
   My bibliography  Save this article

Technological integration and tax compliance: a quantitative evaluation of fraud detection efficiency in judicial tax proceedings in EU member States

Author

Listed:
  • Emilio Abad-Segura

    (University of Almeria)

  • Francisco José Castillo-Díaz

    (University of Almeria)

  • Nathalie Hernández-Pérez

    (University of Pamplona)

  • Luis J. Belmonte-Ureña

    (University of Almeria)

Abstract

This study examines the interaction between tax compliance and tax fraud, focusing on fraud detection strategies implemented in several European Union (EU) Member States. The research highlights the significant variability in the effectiveness of anti-avoidance policies at the national level, correcting the previous confusion between avoidance and tax fraud policies. Using a quantitative approach, we develop a composite indicator based on various tax compliance metrics, which reveals significant differences in the effectiveness of tax policies across countries. This study focuses on the efficiency of judicial mechanisms in detecting, investigating, and prosecuting cases of formally documented tax fraud, drawing on data provided by the European Public Prosecutor’s Office (EPPO). Factor and cluster analysis identifies key components and groups countries according to their tax compliance characteristics. The results suggest a direct relationship between the adoption of technological solutions, specifically in tax compliance systems, and efficiency gains, indicating that countries with advanced technological infrastructures perform better. This study not only provides a detailed assessment of the current tax compliance situation in the EU but also offers valuable conclusions for the design of more effective policies specifically aimed at combating tax fraud and tailored to the socio-economic and technological realities of each Member State.

Suggested Citation

  • Emilio Abad-Segura & Francisco José Castillo-Díaz & Nathalie Hernández-Pérez & Luis J. Belmonte-Ureña, 2025. "Technological integration and tax compliance: a quantitative evaluation of fraud detection efficiency in judicial tax proceedings in EU member States," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 52(3), pages 493-522, August.
    • Handle: RePEc:kap:empiri:v:52:y:2025:i:3:d:10.1007_s10663-025-09654-2
    DOI: 10.1007/s10663-025-09654-2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10663-025-09654-2
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10663-025-09654-2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. James Alm, 2021. "Tax evasion, technology, and inequality," Economics of Governance, Springer, vol. 22(4), pages 321-343, December.
    2. Alexis Dinno, 2015. "Nonparametric pairwise multiple comparisons in independent groups using Dunn's test," Stata Journal, StataCorp LLC, vol. 15(1), pages 292-300, March.
    3. Sabina Silajdzic & Eldin Mehic, 2022. "How Effective Is Tax Policy in Attracting Foreign Direct Investments in Transition Countries?," Central European Business Review, Prague University of Economics and Business, vol. 2022(1), pages 19-39.
    4. Vasilev, Aleksandar, 2018. "Optimal fiscal policy in the presence of VAT evasion: the case of Bulgaria," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 68(4), pages 399-414.
    5. Emmanouil Kitsios & João Tovar Jalles & Geneviève Verdier, 2023. "Tax evasion from cross-border fraud: does digitalization make a difference?," Applied Economics Letters, Taylor & Francis Journals, vol. 30(10), pages 1400-1406, June.
    6. Benno Torgler & Friedrich Schneider, 2007. "What Shapes Attitudes Toward Paying Taxes? Evidence from Multicultural European Countries," Social Science Quarterly, Southwestern Social Science Association, vol. 88(2), pages 443-470, June.
    7. Mihaela Mocanu & Sergiu-Bogdan Constantin & Vasile Răileanu, 2021. "Determinants of tax avoidance – evidence on profit tax-paying companies in Romania," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 34(1), pages 2013-2033, January.
    8. Helena Glebocki Keefe & Ralf Hepp, 2024. "The effects of European fiscal discipline measures on current account balances," International Economics and Economic Policy, Springer, vol. 21(1), pages 251-283, February.
    9. Bilicka, Katarzyna & Qi, Yaxuan & Xing, Jing, 2022. "Real responses to anti-tax avoidance: Evidence from the UK Worldwide Debt Cap," Journal of Public Economics, Elsevier, vol. 214(C).
    10. Colin Williams, 2020. "An Institutional Theory of Tax Non- Compliance in Bulgaria: a Tax Morale Approach," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 1, pages 33-49, March.
    11. Iustina Alina Boitan & Sorina Emanuela Ștefoni, 2023. "Digitalization and the Shadow Economy: Impact Assessment and Policy Implications for EU Countries," Eastern European Economics, Taylor & Francis Journals, vol. 61(2), pages 152-180, March.
    12. Kudrle, Robert T., 2021. "Moves and countermoves in the digitization challenges to international taxation," Technology in Society, Elsevier, vol. 64(C).
    13. Ionuţ Constantin Cuceu & Decebal Remus Florescu & Viorela Ligia Văidean, 2024. "The determinants of compliance VAT gap," Journal of Risk Finance, Emerald Group Publishing Limited, vol. 25(2), pages 277-292, February.
    14. Anastasiou Athanasios & Kalligosfyris Charalampos & Kalamara Eleni, 2022. "Assessing the effectiveness of tax administration in macroeconomic stability: evidence from 26 European Countries," Economic Change and Restructuring, Springer, vol. 55(4), pages 2237-2261, November.
    15. Valpy FitzGerald, 2012. "Global capital markets, direct taxation and the redistribution of income," International Review of Applied Economics, Taylor & Francis Journals, vol. 26(2), pages 241-252, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Colin C. Williams, 2023. "A Modern Guide to the Informal Economy," Books, Edward Elgar Publishing, number 18668, March.
    2. Goel, Rajeev K. & Mazhar, Ummad, 2024. "Cryptocurrency use and tax collections: Direct and indirect channels of influence," Journal of Financial Stability, Elsevier, vol. 72(C).
    3. Cristina Strango, 2021. "Does Digitalisation in Public Services Reduce Tax Evasion?," Economic Research Guardian, Mutascu Publishing, vol. 11(2), pages 221-235, December.
    4. Chen, Shi & Liu, Zhongyi & Cai, Wanlin, 2025. "Digital transformation and tax compliance in Chinese industrial sector," International Review of Financial Analysis, Elsevier, vol. 102(C).
    5. Eric M. Uslaner, 2007. "Tax Evasion, Corruption, and the Social Contract in Transition," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0725, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    6. Zofia Grodek-Szostak & Marcin Suder & Aneta Piechaczek & Luis Ochoa Siguencia, 2021. "Assessment and Comparison of Digital Competences in Education for Selected European Countries," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 1), pages 348-361.
    7. Sónia Cabral & Joana Garcia & Raquel Miranda & Susana Peralta & João Pereira dos Santos, 2024. "Treasure Islands, Real Jobs? Workers and Anti-Avoidance Policies in a Tax Paradise," Working Papers w202416, Banco de Portugal, Economics and Research Department.
    8. Luca Andriani, 2012. "Tax Morale and Pro-Social Behavior: Evidence from a Palestinian Survey," Working Papers 712, Economic Research Forum, revised 2012.
    9. Alvaro Forteza & Cecilia Noboa, 2019. "Perceptions of institutional quality and justification of tax evasion," Constitutional Political Economy, Springer, vol. 30(4), pages 367-382, December.
    10. Xuefeng Shao & Shi Chen, 2024. "Research on Tax Compliance Incentive Effects of Platform Companies from the Perspective of Incomplete Contract – An Empirical Study Based on China," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 26(65), pages 330-330, February.
    11. Manevska-Tasevska, Gordana & Hansson, Helena & Asmild, Mette & Surry, Yves, "undated". "Assessing the regional efficiency of Swedish agriculture under the CAP ‒ a multidirectional efficiency approach," 162nd Seminar, April 26-27, 2018, Budapest, Hungary 271971, European Association of Agricultural Economists.
    12. Dossè Mawussi Djahini‐Afawoubo, 2024. "Understanding tax payment behaviour in the West African Economic and Monetary Union: The role of perceived detection capacity and honesty," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(2), pages 795-823, March.
    13. Adriana AnaMaria Davidescu & Eduard Mihai Manta & Adina Teodora Stoica-Ungureanu & Magdalena Anton (Musat), 2022. "Could Religiosity and Religion Influence the Tax Morale of Individuals? An Empirical Analysis Based on Variable Selection Methods," Mathematics, MDPI, vol. 10(23), pages 1-32, November.
    14. Claudia Keser & David Masclet & Claude Montmarquette, 2020. "Labor Supply, Taxation, and the Use of Tax Revenues: A Real-Effort Experiment in Canada, France, and Germany," Public Finance Review, , vol. 48(6), pages 714-750, November.
    15. Vasilev Aleksandar, 2018. "Optimal Fiscal Policy with Utility-Enhancing Government Spending, Consumption Taxation and a Common Income Tax Rate: The Case of Bulgaria," Review of Economics, De Gruyter, vol. 69(1), pages 43-58, April.
    16. Oksana N. Harkushenko, 2022. "Prospects of VAT Administration Improvement in Digitalized World: Analytical Review," Journal of Tax Reform, Graduate School of Economics and Management, Ural Federal University, vol. 8(1), pages 6-24.
    17. James Alm, 2024. "Tax Compliance, Technology, Trust, and Inequality in a Post-Pandemic World," Working Papers 2404, Tulane University, Department of Economics.
    18. Bilicka, Katarzyna & Scur, Daniela, 2024. "Organizational capacity and profit shifting," Journal of Public Economics, Elsevier, vol. 238(C).
    19. Katarzyna A. Bilicka & André Seidel, 2022. "Measuring Firm Activity from Outer Space," NBER Working Papers 29945, National Bureau of Economic Research, Inc.
    20. Schneider Friedrich, 2015. "Schwarzarbeit, Steuerhinterziehung und Korruption: Was ökonomische und nicht-ökonomische Faktoren zur Erklärung beitragen," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 16(4), pages 412-425, December.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:empiri:v:52:y:2025:i:3:d:10.1007_s10663-025-09654-2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.