Sometimes referred to as a ‘black list’, this is a list of businesses or individuals who have been non-compliant and therefore are regarded as unacceptable or untrustworthy, and often marked down for punishment (e.g., negative publicity) or exclusion (e.g., from tendering for public procurement contracts).

the practice of basing some of a company’s processes or services in another Member State, to take advantage of lower costs in the new location.

Related to the collaborative, sharing or gig economy, this is a business model where activities are facilitated by creating an open and online platform for the provision of services often provided either digitally or on-the-ground by private individuals. Emerging as a new form of organizing work and employment opportunities via platforms, it involves three categories of actors: (i) the platform (often large corporations); (ii) the service provider and (iii) the user/client. The relation between the platform and service provider is often unclear in terms of their employment status.

An employee sent by his/her employer to carry out a cross-border service in another EU Member State on a temporary basis under the freedom of provision of services. For example, a service provider may win a contract in another country and send his employees there to carry out the contract.  Posted workers are entitled by law to a set of core rights in force in the host Member State which include, for example, minimum rates of pay/remuneration, maximum work periods and minimum rest periods, minimum paid annual leave, occupational safety and health, etc.

Requesting a receipt from a business-to-consumer transaction allows the purchaser to enter a lottery, with a chance of winning a prize. The aim is to reduce the undeclared economy by limiting unreported exchanges through the greater issue of receipts.

An alternative approach to combining and sequencing the range of policy approaches and measures available with the purpose of promoting better compliance. This responsive regulation approach uses indirect measures first with citizens and businesses, then incentives, and deterrents only for those still failing to comply (cf. full policy operationalisation model which uses all measures concurrently). 

As part of the full policy operationalisation model, a structured process for the systematic identification, assessment, ranking, and treatment of labour, tax and social security law compliance risks (e.g., failure to register, failure to properly report tax liabilities etc.). This helps labour, tax and social insurance inspectorates to target their compliance activities.

An approach where the direct and indirect policy measures used to tackle undeclared work are specifically designed and targeted at one sector whose characteristics in terms of undeclared work are different from other sectors and whose problems and risk factors require a specific approach.

The state of working for oneself rather than an employer. A self-employed person is ‘pursuing a gainful activity for their own account, under the conditions laid down by national law'. As indicated by the European Commission in 2010, there are different understandings and definitions of the term self-employment across Member States.

A means of payment, subsidised by government, which allows a private user to pay an employee for conducting tasks. By providing service vouchers to those employing labour, which pays a portion of the fee given to the worker, the intention is to encourage those employing labour to purchase services on a declared rather than undeclared basis.

[Williams, C.C. (2018) Elements of a preventative approach: service vouchers and awareness raising campaigns, European Commission, Brussels.]

The shadow economy includes both undeclared work as well as broader criminal activities. Besides undeclared work, it therefore additionally includes the provision of goods and services that are themselves unlawful (e.g., the production or trafficking of illegal drugs, human trafficking or money laundering forbidden by law).

Employing a firm or person outside one’s company to do work as part of a larger project.

A limited-time offer by a government to a specified group of taxpayers to pay a defined amount, in exchange for forgiveness of a tax liability (including interest and penalties) relating to a previous tax period(s), as well as freedom from legal prosecution.

[Baer, K. and E. LeBorgne (2008), Tax Amnesties: theory, trends and some alternatives, Washington DC: International Monetary Fund.]

A demand-side incentive which offers purchasers of household services a reduction in their direct taxes owed by reclaiming the costs of the help or expenses for household services as a means of reducing the cost of declared work and transforming undeclared work into declared work.

The intrinsic motivation to willingly pay taxes owed. It is a measurement of a positive attitude and commitment to the payment of tax, and often measured by assessing citizens’ views of the unacceptability of engaging in undeclared work.

[Eurofound (2013), op cit.]

Any natural or legal person who, in compliance with national law, concludes contracts of employment or employment relationships with temporary agency workers in order to assign them to user undertakings to work there temporarily under their supervision.

[Directive 2008/104/EC of the European Parliament and of the Council of 19 November 2008 on temporary agency work, article 3 para 1b.]

A company that acts as an employer to workers who work under a fixed-term contractual assignment with an external client. The worker is not employed by the external client, but by the umbrella company. The umbrella company allows workers to work as an ‘employee’ rather than having to register as a business/self-employed. The umbrella company provides payroll for work carried out by the worker.

Paid activity conducted by the self-employed where income is not declared for the purpose of evading either tax and/or social insurance contributions owed. The self-employed may not declare either some or all their income. 

Any paid activities that are lawful as regards their nature but not declared to public authorities, taking account of differences in the regulatory systems of the Member States. Member States have adopted a variety of different definitions focusing upon non-compliance with either labour, tax and/or social security legislation or regulations.

When formal employers pursue the illegal practice of reducing their tax and social security payments, and therefore labour costs, by under-declaring the remuneration of employees. This occurs when employers pay their formal employees two salaries: an official declared salary and an additional undeclared (‘envelope’) wage which is hidden from the authorities for tax and social security purposes. Alternatively, an employer can under-declare the number of hours an employee works, such as to evade paying the minimum wage.