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Tax Evasion in Tourism Hard to Investigate

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Tax Evasion in Tourism Hard to Investigate

Strokkur Geysir Golden Circle

Photo: Ian Funk.

A majority of investigators at The Directorate of Internal Revenue are looking into cases connected to the tourism industry, RÚV reports. The cases are complicated due to the prevalence of cash transactions and the industry’s connections abroad.

Guðrún Jenný Jónsdóttir is the head of the Department of Investigation at the directorate. She says such cases can prove challenging to investigate, especially when a company’s activities stretch across borders. The directorate is currently investigating revenue earned through Airbnb as well as other types of accommodation. “We are looking into the field as a whole,” Guðrún Jenný states. “We have for example been looking into those [companies] that are in transportation i.e. bus transport and excursions and the like.”

No comprehensive analysis has been made of tax evasion in Icelandic tourism. The industry is, however, vulnerable to the practice due to the fact many transactions are made using cash.

“It is also easier to keep income outside of taxation when you have business to some extent outside the country, i.e. when you use foreign agents for booking services,” Guðrún Jenný adds.

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