Austria has recently published draft legislation on fighting tax fraud.
Introduction of criminal cross-border VAT fraud offence
Austria has recently published draft legislation on fighting tax fraud. The proposals relating to VAT introduce a new provision creating a criminal liability for cross-border VAT fraud. This provision would apply to fraud resulting in at least EUR 10 million of damage as a result of:
Sanctions are set at between one to ten years’ imprisonment and fines of up to EUR 2.5 million.
Court decides criminal risk of tax evasion for missed input VAT adjustments
The Austrian Federal Finance Court has decided that a taxpayer may be held to have committed tax evasion (a criminal offence), if his tax adjustments of input VAT are made in an incorrect pre-notification period. The court explained that there is a justified suspicion of tax evasion if the taxpayer did not act according to the tax advice he had received.
The draft bill is now at appraisal stage. If enacted, businesses need to make sure they are aware of what constitutes such a breach and what the penalties are. Sanctions for criminal offenses are more severe than for civil infringements.
The court decision reinforces the importance of following correct compliance procedures and of course. Contact our VAT experts now and find out how these developments could affect your business.