What is tax criminal law?
Tax criminal law encompasses acts and omissions that are made punishable under the State Taxes Act (AWR). This includes tax evasion, falsifying certain documents, laundering tax income, etc. However, not every violation of the AWR constitutes a criminal offense. Minor violations are often handled through administrative law. The AWR explicitly determines which acts and/or omissions can be criminally prosecuted. Some examples include acting in violation of the AWR by:
- failing to provide or providing incorrect information, data, or instructions;
- failing to make books, documents, other data carriers, or their contents available for inspection, as well as making false or forged versions of those documents available for inspection, and
- maintaining records that do not meet the requirements set out in the AWR.
Depending on the specific offense committed, the penalty you may receive can be higher or lower. Sentencing will also vary per offender. A tax offense committed by you—a natural person—will be punished differently than a tax offense committed by a legal entity. For more information on the liability of companies and other legal entities, please see our page on corporate criminal law.
What if you accidentally file an incorrect tax return?
Filing an incorrect tax return or failing to file one at all can lead to criminal prosecution. However, this will only happen if the Public Prosecution Service is of the opinion that you did this intentionally. In addition, the law requires that as a result of this failure, too little tax was actually levied.
In the event that you simply forget to file your tax return, you will, in principle, not be criminally prosecuted. This is only different if you have been so negligent that you consciously accepted the significant risk of violating this filing obligation. In that case, it is considered conditional intent. It is up to the Public Prosecution Service to prove this. A criminal defense lawyer can assess whether this can be established in your case.
What if you file your return late?
If you did not file your return on time by accident rather than intentionally, you will receive a reminder from the tax authorities containing a new deadline. If your return is still not received by the tax authorities within that second period, a default penalty will be imposed. The longer the delay, the higher the fine. However, this concerns a tax fine and is therefore not considered a criminal sanction. If a tax fine has been imposed on you, the Public Prosecution Service may not also prosecute you criminally for that same violation. That would lead to double punishment.
Who is the investigative authority?
The investigation of tax offenses is carried out by and under the supervision of the Fiscal Intelligence and Investigation Service (FIOD). They work together with the Public Prosecution Service (OM) to detect and criminally prosecute these crimes. To investigate criminal offenses, they can use various investigative powers, such as searches, seizures, and even the placement and use of wiretapping equipment. It is common for the FIOD to conduct a raid to exercise these powers. This can happen at your home, but also at your business to seize the entire administration. However, the application of such investigative powers is bound by legal regulations and may not be applied in every situation. A lawyer can analyze the file to determine if there was unauthorized use of investigative powers in your case, as well as the legal consequences that should be linked to this procedural error.
The FIOD can also interrogate you as a suspect in the context of your criminal case. They do this if you have been arrested by them or when you have received an invitation for an interrogation. These investigative officers are trained in various interrogation techniques designed to get you to make an incriminating statement. A criminal defense lawyer can inform and advise you prior to the interrogation about what to expect and what you should or should not state. The lawyer will also support you during this interrogation to ensure everything proceeds correctly.
What penalties can you receive for committing a tax offense?
The aforementioned tax offenses are criminal acts within the meaning of the Criminal Code and can therefore be sanctioned in the same way. This means that, among other things, a fine, community service, or even a prison sentence can be imposed. As indicated earlier, the severity of the penalty depends on the specific violation.
If one of the aforementioned criminal offenses is committed intentionally and as a result too little tax is levied, a prison sentence of up to four years can be imposed. You could also receive a fine of the fourth category. In the event that the tax benefit you enjoyed is higher than this fine, a fine may be imposed that is at most as high as that benefit.
These penalties are generally imposed by a criminal judge at the end of criminal proceedings. However, tax criminal law also provides for a special settlement option: the fiscal punishment order (FSB). This means that the Tax Authorities (or Customs) can impose a penalty on you themselves—without the intervention of a judge. This is often a fine, but other penalties and measures are also possible. This includes having to surrender certain goods or meeting other tax obligations. In some cases, there is also the possibility of a transaction. In short, this means you pay a certain amount to the tax authorities, and the criminal case ends there. In that case, no entry will be made on your judicial record (criminal record).
Why hire a lawyer if you are suspected of a tax offense?
The Dutch tax system is complex and includes numerous laws with all kinds of rules that you, as a citizen or legal entity, must adhere to. This makes it conceivable that you could be guilty of a tax offense without knowing it yourself. A conviction can have very far-reaching consequences not only for you but also for your environment and/or business. The lawyers at our firm can look at your case with a critical eye and determine whether you can actually be held criminally responsible. We advise you on the best options within your case and assist you from the beginning to the end of the proceedings. With an expert view of your case, we provide you with the best possible outcome. Please feel free to contact us.
