Tax authorities from Australia, Canada, France, the UK and the USA have conducted a joint probe into “electronic sales suppression software” – applications that falsify point of sale data to help merchants avoid paying tax on their true revenue.
A Friday announcement [PDF] from the Joint Chiefs of Global Tax Enforcement (known as the J5), states that the probe “resulted in the arrest of five individuals in the United Kingdom who allegedly designed and sold electronic sales suppression systems internationally.”
These tools allow retailers to keep a separate set of books and launder money in one transaction
Those responsible allegedly started to export their wares during the COVID-19 pandemic.
“These dodgy sales suppression tools allow retailers to keep a separate set of books and launder the money in one transaction,” explained J5 chief and Australian Taxation Office deputy commissioner John Ford.
“They conceal and transfer this income anonymously, sometimes offshore.”
“So what might happen is that the customer orders a $60 steak and a $100 bottle of wine,” Ford explained, at which point the software changes the transaction so it is recorded in the point of sale system as “a $10 bowl of chips and a $4 bottle of soft drink.”
Such shenanigans are transparent to customers, who still pay the full amount. But the retailer ends up with recorded revenue of $14, and $146 to launder.
The J5’s statement about its probe asserts that ESS originated in the UK, and