Tax evasion: A "facelift" for fines and the framework for business closures

The new framework closes all “loopholes” for avoiding penalties through changing companies or transferring business operations, while under the new regime, the imposition of penalties no longer depends exclusively on the number of receipts that were not issued, but also on their value.

As stipulated by a decision of the Independent Authority for Public Revenue (AADE), if the concealed value exceeds 500 euros, penalties are imposed regardless of the number of receipts.

In other words, even a single receipt could lead to the suspension of the business’s operations, and the same logic applies to the failure to transmit data to the AADE’s information system.

Specifically, the decision provides for:

• Suspension of business operations for 48 hours upon the first serious violation,
• 96 hours in the event of a repeat offense within the same or the following tax year,
• A 10-day closure for a new recurrence within two tax years.

And the providers

For the first time, providers of electronic data issuance services, software and hardware companies, technicians, or companies that provide support for illegal interventions are explicitly included in the sanctions framework.

More specifically:

• Companies using counterfeit systems risk having their operations suspended for 2 to 12 months.
• Software or technical support companies involved in such practices may be punished with a suspension of operations ranging from 3 to 24 months.

“Blockade”

The new decision also aims to prevent practices designed to evade sanctions through a change in legal structure or the transfer of the business. Now, even if the business entity changes, operations are suspended, or a new corporate structure is created, the suspension of operations may still be imposed as long as the same activity continues, it operates in the same location, and the same or affiliated persons are involved.

The decision introduces a more detailed procedure for notifying findings and enforcing suspension orders. Specific deadlines are also set prior to the implementation of the “shutdown” to ensure the right of the inspected party to be heard.

More specifically:

• The suspension of operations in cases where a “lockdown” penalty of 96 hours or 10 days is imposed may not begin before two calendar days have elapsed from the date of service of the suspension order and the written notice specifying the time of its execution.
• If the conditions for suspension of operations are met, a notice of audit findings containing the results of the tax audit is served on the taxpayer, and the audit authorities shall indicate that the commission of the specific acts may result in the imposition of the measure of suspension of operations of the business establishment.
• The suspension of operations may not begin until 5 calendar days have elapsed from the date of service of the decision and the relevant written notice regarding the time of its execution.

Special fine  

In cases of threats to use force with weapons or other objects capable of causing bodily harm or endangering the life of an AADE employee or the use of force that resulted in bodily harm or a life-threatening situation, or that could have caused bodily harm or a life-threatening situation to an AADE employee, during and as a result of the performance of their duties or for reasons related to the performance thereof, the following penalties shall be imposed cumulatively:

• A special fine ranging from 10,000 to 50,000 euros on the person responsible for committing the above acts and:
• Suspension of the operation of the business premises of the person responsible for committing the aforementioned acts, as determined by the decision of the Governor of the Independent Authority for Public Revenue (AADE), for a period of 2 to 6 months, and from 6 months up to 3 years in the event of a repeat offense.