Legal assistance in cases of VAT evasion
No other type of tax involves offences relevant under criminal tax law more common than in the Value Added Tax. This is also supported by the so-called All-phase net VAT system with input tax deduction and also by the intra-Community trade in goods and is favoured under EU law.
How VAT evasion can occur even without direct intent
Particularly in the case of so-called VAT carousels, tax investigators repeatedly focus not only on those acting with intent, but also on business owners who are unwittingly and unintentionally drawn into these schemes.
In the case of service providers, tradespeople, cash-based businesses and the hospitality sector – sometimes in conjunction with the evasion of other taxes, in particular income tax and business rates – situations relevant under criminal tax law frequently arise due to missing or incomplete invoices or incorrect tax rates. This applies in particular to intra-Community supplies of goods and services.
Even providing false information or simply failing to submit advance VAT returns or annual VAT returns may constitute an offence under criminal tax law. This applies even if no tax evasion has taken place as a result. What is decisive, rather, is whether the information provided was complete and truthful.
Early support helps
In most cases, VAT offences are uncovered during a field audit or a special VAT audit. Given the specific nature of criminal tax law, in such cases – even if the taxpayer merely suspects that the offence has been uncovered – one should not hesitate to seek legal advice in order to avoid any unnecessary adverse consequences.
In the case of value added tax in particular, in addition to criminal sanctions, the tax authorities may sometimes issue assessed tax assessments, the amount of which, in turn, can be a decisive factor in determining the severity of the penalty. The potential loss faced by the businesses concerned can have far-reaching consequences.
We are happy to assist you with all matters relating to criminal tax law. The person responsible for the criminal tax law practice is Matthias E. Grimme, solicitor, specialist in tax law and tax adviser, who specialises in this area of law, amongst others, and has many years of experience.