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

Emilio Abad-Segura (), Francisco José Castillo-Díaz (), Nathalie Hernández-Pérez () and Luis J. Belmonte-Ureña ()
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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

Empirica, 2025, vol. 52, issue 3, No 4, 493-522

Abstract: 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.

Keywords: Tax compliance; Composite index; Fiscal policy; Tax technology; European Union; Digital infrastructure; Institutional efficiency; Judicial data; Fraud detection (search for similar items in EconPapers)
JEL-codes: C38 H26 H30 O33 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10663-025-09654-2

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