Austria: impact of the fight against tax fraud

As we said in our last article, a proposal for a European directive dating July 2012 is aimed at harmonizing on a European level the fight against tax fraud and other illegal activities against the European Union’s financial interest.

If adopted, the Directive proposal would impact in Austria in the first place natural persons (managing directors etc.) who act on behalf of a company. From the Austrian point of view the proposal implies a considerable aggravation compared to the Austrian Penal Tax Code. In the event of premeditated tax evasion, the Austrian Penal Tax Code applies fines up to double the reduced tax amount. Prison sentences are handed out in principle only as alternative to fines.

The Directive proposal provides for prescription periods between 5 and 10 years while the Austrian Penal Tax Code applies a prescription period between 3 or 5 years or an absolute prescription period of 10 years.

It remains to be seen to which extend the Directive proposal will be adopted. If implemented in the current form, it will bring significant changes.

Depending on the amount of the damage and the criminal offence committed, the Directive proposal provides for imprisonment between 6 months and 5 years. If criminal offences are committed in the framework of a criminal organisation, imprisonment could go up to ten years.Alessandro Pasut

For a consultation by Alessandro Pasut on international economy click here.

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