Algorithmic Tax Havens

Abstract

This study examines the emerging concept of algorithmic tax havens, proposing a functional reconsideration of traditional tax-haven criteria in light of the digital transformation of taxable activities. It argues that inadequate mastery of algorithmic tax technologies may evolve from an administrative deficiency into an institutional vulnerability capable of systematically reducing the probability of detecting and proving sophisticated tax non-compliance. Such technological asymmetry between digitally sophisticated taxpayers and tax administrations may reproduce effects traditionally associated with secrecy and weak regulatory oversight, thereby undermining effective tax sovereignty, fiscal equality, deterrence, and criminal tax security. The study further distinguishes ordinary digitalisation from genuine algorithmic administrative capacity, emphasizing data interoperability, advanced risk analysis, multidisciplinary expertise, and legally admissible digital evidence. It concludes that preventing algorithmic tax havens requires integrated legal and technological preparedness, reinforced international cooperation, explainable analytical tools, and effective judicial safeguards ensuring that enhanced tax enforcement remains consistent with legality, proportionality, transparency, privacy, and taxpayers’ procedural rights.