Insights
TAX & BUSINESS
New Fiscal Offence
The Federal Fiscal Court (BFG) clarified that the use of falsified, false or incorrect documents constitutes an independent fiscal offence alongside tax evasion, and that the two offences can therefore be punished separately.
Furthermore, the use of such documents was qualified as a continuing offence, which in particular affects the limitation period for this fiscal offence.
The provision of the Fiscal Penal Code (Finanzstrafgesetz) covers cases in which, with the intent to simulate a business transaction or to conceal its true nature, documents are falsified, false or incorrect documents are produced or such documents are used, with a fine of up to EUR 100,000 possible. Accordingly, the provision is aimed especially at the creation or use of dummy and cover invoices.
In a BFG case, a motor‑vehicle dealer unauthoritatively altered various incoming invoices issued to him by inserting fabricated, higher purchase prices and thereby committed VAT reductions (through an excessive input‑tax deduction). The motor‑vehicle dealer was fined EUR 20,000 both for tax evasion and for the fiscal offence, against which the dealer lodged an appeal. The BFG, however, upheld the penalty.
Continuing offence
The BFG also qualified the fiscal offence as a continuing offence, which persists until the falsified invoice is removed from the accounts. For a continuing offence, the limitation period only begins upon its termination, in the BFG’s view therefore only when the relevant invoice is removed from the accounts. If such a document remains in the accounts, the limitation period does not start. This can also affect other fiscal offences already committed, as they may likewise not become time‑barred.
Tip: Not every erroneous invoice automatically constitutes a fiscal offence. However, with doubtful documents a swift clarification is important, so in concrete cases an early consultation with the tax or fiscal‑criminal adviser is recommended. In the present case, a fiscal offence can also be remedied by a voluntary disclosure.
The provision of the Fiscal Penal Code (Finanzstrafgesetz) covers cases in which, with the intent to simulate a business transaction or to conceal its true nature, documents are falsified, false or incorrect documents are produced or such documents are used, with a fine of up to EUR 100,000 possible. Accordingly, the provision is aimed especially at the creation or use of dummy and cover invoices.
In a BFG case, a motor‑vehicle dealer unauthoritatively altered various incoming invoices issued to him by inserting fabricated, higher purchase prices and thereby committed VAT reductions (through an excessive input‑tax deduction). The motor‑vehicle dealer was fined EUR 20,000 both for tax evasion and for the fiscal offence, against which the dealer lodged an appeal. The BFG, however, upheld the penalty.
Continuing offence
The BFG also qualified the fiscal offence as a continuing offence, which persists until the falsified invoice is removed from the accounts. For a continuing offence, the limitation period only begins upon its termination, in the BFG’s view therefore only when the relevant invoice is removed from the accounts. If such a document remains in the accounts, the limitation period does not start. This can also affect other fiscal offences already committed, as they may likewise not become time‑barred.
Tip: Not every erroneous invoice automatically constitutes a fiscal offence. However, with doubtful documents a swift clarification is important, so in concrete cases an early consultation with the tax or fiscal‑criminal adviser is recommended. In the present case, a fiscal offence can also be remedied by a voluntary disclosure.