What is tax evasion?
Tax evasion is the offense committed when income is concealed from the Tax Administration with the aim of avoiding payment of the corresponding tax.
Example
A success of our firm: the acquittal of a defendant accused of accepting fictitious invoices, on appeal at second instance before the Three-Member Misdemeanor Court: Acquittal – Fictitious Invoices – Appeal – Three-Member Misdemeanor Court
Principal Tax Evasion Offenses
The principal offenses of interest to the tax authorities are, pursuant to Article 3, point (ih) of Law 3691/2008, the following:
A) Tax evasion:
i) Failure to file a return or filing of an inaccurate income tax return, where the tax corresponding to the net income that has been concealed exceeds in each fiscal period the amount of fifteen thousand (15,000) euros, as well as the avoidance of payment of vessel tax (Article 17 of Law 2523/1997 – Government Gazette 179 A’ – as in force).
ii) Non-remittance or inaccurate remittance of VAT, withholding and pass-through taxes, duties or contributions, where the amount of principal tax, duty or contribution due, or the amount of VAT that was set off or not remitted or inaccurately remitted, exceeds 3,000 euros on an annual basis (Article 18, with the exception of point (a) of paragraph 1, of Law 2523/1997, as in force).
iii) Issuance or acceptance of fictitious tax documents for a transaction that is non-existent in whole or in part, where the total value of the fictitious tax documents exceeds the amount of three thousand (3,000) euros, as well as non-issuance or inaccurate issuance of documents (Article 19, with the exception of the case in the first sentence of paragraph 1 of Law 2523/1997, as in force and following the replacement of Presidential Decree 186/92 by the provisions of the KFAS).
B) Non-payment of debts to the State, where the total debt from any cause, including all types of interest or surcharges up to the date of the debt schedule, exceeds ten thousand (10,000) euros, with the exception of non-payment of debts arising from monetary penalties or fines imposed by courts or administrative authorities (Article 25 of Law 1882/1990 – Government Gazette 43 A, as in force, with the exception of point (a) of paragraph 1).
Pursuant to the provisions of point (a) of paragraph 1 of Article 66, an offense of tax evasion is committed by anyone who conceals from the agents of the Tax Administration taxable income from any source or assets with the aim of avoiding payment of income tax, the Real Estate Property Tax (ENFIA) or the Special Real Estate Tax.
By way of indication (the law uses the wording “in particular”), the cases of avoidance of payment of taxes due include:
– Failure to file a return.
– Filing of an inaccurate return.
– Recording in the accounting books of fictitious (wholly or partly) expenses.
– Invoking such expenses in the tax return so that taxable matter is either not shown at all or appears reduced.
Furthermore, the offense of tax evasion also includes the cases of:
– Misleading the Tax Administration by presenting false facts as true.
– Improper concealment or suppression of true facts, with the aim of non-remittance, inaccurate remittance, inaccurate offsetting or inaccurate deduction of taxes etc., or with the aim of obtaining a refund.
What are forged and fictitious invoices?
A more specific category of tax evasion is the one defined in paragraph 5 of Article 66 of Law 4174/2013 and concerns the issuance of forged or fictitious tax documents.
A tax document is generally considered forged when it has been made in imitation of another and is used fraudulently in place of the genuine one.
A tax document is also considered forged when it has been stamped in any manner without the relevant act of certification having been entered in the books of the competent tax authority, provided that the failure to enter the certification is within the knowledge of the person obliged to certify the tax document.
The same provisions stipulate that a tax document is also deemed forged when the content and other elements of the original or copy differ from those entered on the stub of the same document.
Fictitious, in general, is a document that has no real substance, that is false. Pursuant to the relevant provision, fictitious is a tax document issued for a transaction that is non-existent in whole or in part, or for a transaction in which one of the contracting parties shown on the document is a person unknown for tax purposes, in the sense that they have neither declared the commencement of their activity nor certified documents with the Tax Administration.
Fictitious is also considered to be a document purportedly issued or received by a fictitious company, joint venture, partnership or other business entity of any form, or legal entity, or by a natural person who is shown to have no involvement whatsoever in the specific transaction. In this last case, criminal prosecution is brought against the actual responsible person who is concealed behind it.
- See also article Defamation
- See also article Bodily Harm
- See also article Narcotics
- See also article Fraud
- See also article Forgery
- See also article Embezzlement
- See also article Negligent Homicide
FREQUENTLY ASKED QUESTIONS ON TAX EVASION – FORGED AND FICTITIOUS INVOICES
1. What sentence do I face for accepting fictitious invoices?
The sentence depends as a rule on the total value of the fictitious tax documents. Where the value exceeds 75,000 euros, the offense takes on a felony character, while at lower amounts it remains at the level of a misdemeanor. There are, however, significant margins for reduction through recognition of mitigating circumstances under Article 84 of the Penal Code (PK) (prior honest life, sincere remorse, good conduct after the act), suspension under Article 99 PK, or conversion into a monetary penalty under Article 80 PK. At the same time, the settlement of the taxes due before trial operates as a strong ground for reduction of the sentence and in certain cases leads to extinction of criminal liability.
2. How does a defendant accused of fictitious invoices defend themselves?
The defense focuses on contesting intent (dolus), which is a necessary element of the offense. Often the businessperson receives invoices in good faith, without knowing of the fictitious nature of the transaction or the problematic tax status of the issuer. The evidence for the actual performance of the transaction (transport documents, bank payments, receipt of goods, correspondence), the credibility of the tax reports and any procedural defects in the pre-trial stage are scrutinised. An acquittal obtained by our firm at second instance for acceptance of fictitious invoices shows that proper handling can completely change the outcome.
3. When does the offense of tax evasion become time-barred?
The statute of limitations depends on the character of the offense as a misdemeanor or felony. For misdemeanors, the limitation period is generally completed in five years, while for felonies in fifteen. However, in tax offenses special rules apply as to the commencement of the period, which is often placed from the finality of the tax assessment or from the time of detection. A careful examination of the case file by an experienced lawyer is crucial, as many cases reach the courtroom with limitation issues that can lead to cessation of criminal prosecution.
4. What documents does the lawyer need to take on a case?
Required are the audit report of the tax authority, the criminal complaint, the audit sheets and assessment acts, as well as any petitions filed before the administrative courts. Also needed are the invoices in question, the books and records of the business, bank movements, payment receipts, transport documents and any element that demonstrates the reality of the transactions. Cooperation with the company’s accountant is important for reconstructing the facts, as is the gathering of documents that substantiate the good faith and diligence of the defendant.
5. How long does the criminal procedure for tax evasion last?
From the filing of the criminal complaint by the tax authority to the trial at first instance, two to four years usually elapse, depending on the court’s caseload and complexity. The trial at second instance adds a further one to two years. In felony cases, a main investigation precedes, which significantly extends the procedure. Petitions before the administrative courts run in parallel and have their own separate timeframes. Proper coordination of criminal and administrative proceedings is critical, as a favorable outcome at the administrative court positively affects the criminal judgment.
6. What is the lawyer’s role from the very first moment?
The presence of an experienced criminal lawyer from the preliminary investigation stage is decisive. The right strategy in the defense statement, the choice between exercising the right to silence and providing explanations, and the timely gathering of evidence determine the course of the case. Our firm undertakes parallel representation at criminal and administrative level, communication with the tax authority, the filing of memoranda, the negotiation of debt arrangements and the defense at all degrees of jurisdiction, with the aim of acquittal or the maximum possible reduction of the criminal consequences.