Check out this article from our colleague, Matt Walters:
I used to be the first to admit my hostility to social media sites and the sharing of personal information online: with profiles on Facebook and LinkedIn, both personal and professional sides of my life are out there, and I'm known to be quite cautious about keeping them separate.
With LinkedIn's growth over the last few years, however, I have been forced to swallow my pride and admit that my profile there has generated business for Capital and allowed me to stay in touch with interesting contacts. I have therefore willingly invested more time in my profile and in keeping an eye on the news feed to see who's doing what and where.
And apparently I'm not the only one.
It has recently emerged that the German Finanzamt has also been using social media sites as a source of information for ongoing investigations, looking keenly at contractors' status, occupation and location for information that may deviate from the 'official' version reported on tax returns and residency statements. Often, discrepancies between this official version and the 'friends-only' information published on social sites can be a useful tool for authorities suspicious of a contractor's honesty.
This really shouldn't come as a surprise. In Switzerland it's not unusual for the authorities to contact landlords to confirm whether an individual truly lives at their address, and in the UK anything from phone records to travel tickets are routinely used in residency cases. The use of this new resource should simply be seen as an extension of this practice: any available means will be used to verify the information provided by taxpayers and challenge those who decide not to be truthful in their dealings with the tax authority.
This also serves as a reminder that the default settings on most social media websites are very open: if you are not willing to share any aspect of what you have published with people you don't know you should look to go through your settings and make sure that these match your expectations.
Finally, allow me to restate the obvious: tax is complicated. Rules, interpretations and priorities change from country to country. Before you make a move to a foreign country, you should always seek professional advice from a local expert and ensure that your strategy makes sense in light of local legislation.
- Matt Walters
If you would like to discuss European taxation matters, please feel free to contact us.
If you would like to connect with me on LinkedIn, please get in touch and mention this article.