Creation of a data-driven decision engine on internationally exchanged information

The Commission helped the Belgian tax administration, Federal Public Service (FPS) Finance, to effectively manage tax risks and compliance linked to the exchange of information between Member States, based on the Directive on Administrative Cooperation (DAC) in the field of taxation.  Automation of this kind of work was essential and contributes to making administration of taxes more seamless and frictionless over time, and to bringing potentially significant reductions in administrative burden.

Context

Typically, tax administrations exchange every year significant amounts of data (on revenues from employment, immovable property, interests, dividends, company earnings, etc.) that would take huge efforts if processed manually for risk management purposes and correct determination of tax obligations. Furthermore, additional efforts needed to be done in terms of monitoring, ensuring data quality, and efficiently using the information received. In practice, Member States should (i) ensure that the information they exchange is complete and of sufficient quality, (ii) introduce systematic procedures for the risk analysis of incoming information and (iii) use them as extensively as possible.

Support delivered

The private consultant provided support to the FPS Finance during 20 months in the form of analytical work, development of technical specifications for a data-driven decision engine and a manual for the tax auditors on efficient use of the exchanged tax data. The analytical report included an analysis of the existing situation in terms of use of tax data under the DAC, the identification of the different business objectives, the design of the desired future situation, and a gap analysis and transition plan to progress from the existing to the desired future situation. A final training and discussion were organised in the form of a workshop in Brussels on 21 April 2023. 

Results achieved

After the end of the project, the FPS Finance was able to adjust its internal processes and methodologies and prepare for the development of data-driven decision engine, with a view to increase the efficient use of the internationally exchanged data and shift to data-driven audits on the short to medium term. Also, FPS Finance benefited from better prepared human resources that would ensure an effective exchange of data under the DAC and use of the available data for targeted audits. The following results are envisaged on the medium term: improved risk management, better tax collection and simplified tax processes/lower administrative burden.

More about the project

You can read the documents related to the project here: