As on 1 January 2015

Section 370 – Tax evasion

(1) A penalty of up to five years’ imprisonment or a monetary fine shall be imposed on any person who

  1. furnishes the revenue authorities or other authorities with incorrect or incomplete particulars concerning matters of substantial significance for taxation,
  2. fails to inform the revenue authorities of facts of substantial significance for taxation when obliged to do so, or
  3. fails to use revenue stamps or revenue stamping machines when obliged to do so and as a result understates taxes or derives unwarranted tax advantages for himself or for another person.

Voluntary disclosure of tax evasion

(1) Whoever, in relation to all tax crimes for a type of tax, fully corrects the incorrect particulars submitted to the revenue authority, supplements the incomplete particulars submitted to the revenue authority or furnishes the revenue authority with the previously omitted particulars shall not be punished pursuant to section 370 on account of these tax crimes. The information provided must cover all tax crimes for one type of tax that have not become time-barred, and at least all tax crimes for one type of tax within the last 10 calendar years.

(2) Exemption from punishment shall not apply if,

  1. prior to the correction, supplementation or subsequent furnishing of particulars in connection with voluntarily disclosed tax crimes that have not become time-barred,

    a) the person involved in the act, his representative, the beneficiary as referred to in section 370 (1), or the beneficiary’s representative has been notified of an audit order in accordance with section 196, limited to the material and temporal scope of the ordered external audit, or

    b) the person involved in the act or his representative has been notified of the initiation of criminal proceedings or administrative fine proceedings, or

    c) a public official from the revenue authority has already appeared for the purpose of carrying out a tax audit, limited to the material and temporal scope of the external audit, or d) a public official has already appeared for the purpose of investigating a tax crime or tax-related administrative offence, or e) a public official from the revenue authority has already appeared and provided proof of identity for the purpose of conducting a VAT inspection in accordance with section 27b of the VAT Act, a wages tax inspection in accordance with - 236 - section 42g of the Income Tax Act or an inspection in accordance with other tax law provisions, or
  2. one of the tax crimes had already been fully or partially detected at the time of the correction, supplementation or subsequent furnishing of particulars and the perpetrator knew this or should have expected this upon due consideration of the facts of the case,
  3. the tax understated pursuant to section 370(1) or the unwarranted tax advantage derived by someone for himself or for another person exceeds the amount of 25,000 euros per act, or
  4. a particularly serious case exists as specified in section 370(3), second sentence, numbers 2 to 5.

In the event that exemption from punishment is ruled out in accordance with the first sentence, numbers 1a) and 1c) above, this shall not preclude the submission of a correction in accordance with subsection (1) above in connection with tax crimes for one type of tax that do not fall under the scope of the first sentence, numbers 1a) and 1c) above.

  1. (2a) Insofar as tax evasion has been committed by breaching the obligation to submit a complete and accurate provisional VAT return or wages tax return on time, exemption from punishment shall apply, notwithstanding subsection (1) and subsection (2), first sentence, number3 above, if the perpetrator corrects the incorrect particulars submitted to the competent revenue authority, supplements the incomplete particulars submitted to the competent revenue authority, or furnishes the competent revenue authority with the previously omitted particulars.

    Subsection (2), first sentence, number 2 above shall not apply if the act was detected upon the discovery that a provisional VAT return or wages tax return was corrected or submitted late. The first and second sentences above shall not apply to tax returns relating to the calendar year. In order for a voluntary disclosure relating to a tax return for a particular calendar year to be deemed complete, it shall not be compulsory to correct, supplement or subsequently furnish particulars for provisional returns concerning time periods following that calendar year.
  2. (3) Where tax has already been understated or tax advantages have already been derived, exemption from punishment shall be granted to the person involved in the act only if he pays, within the reasonable period of time allowed to him, the taxes which were evaded to his - 237 - benefit through the perpetration of the act, the interest payable on the evaded taxes in accordance with section 235, and the interest payable under section 233a insofar as such interest is charged on the interest payable on the evaded taxes in accordance with section 235(4).

    In cases covered by the first sentence of subsection (2a) above, the first sentence above shall apply with the proviso that the timely payment of interest in accordance with section 233a or section 235 is immaterial.
  3. (4) Where the notification provided for in section 153 is punctually and duly filed, a third party who failed to make the statements referred to in section 153 or who made such statements incorrectly or incompletely shall not be prosecuted unless he or his representative was previously notified of the initiation of criminal or administrative fine proceedings resulting from the act.

    Subsection (3) above shall apply accordingly where the third party has acted for his own benefit.