The government is attempting to increase pressure on organized tax evasion, by submitting a new amendment to Parliament.
The new framework provides for fast-track procedures for tax audits, the imposition of taxes and fines, as well as the criminal prosecution of cases related to criminal organizations.
The initiative primarily targets networks that exploit front companies, fictitious invoices, intermediaries, and complex corporate structures to evade tax obligations, with a primary focus on VAT.
At the same time, efforts are being made to address the problem of significant delays that have existed until now, as tax and criminal proceedings were conducted separately, without meaningful coordination.
Closer cooperation between DAOE and AADE
Cooperation between the Directorate for Combating Organized Crime (DAOE) and the AADE.
When, in the context of a prosecutor’s investigation, serious evidence emerges of criminal tax evasion linked to the activities of a criminal organization, the DAOE will complete the preliminary investigation and immediately forward its findings to the AADE.
Subsequently, the tax administration will proceed to issue a provisional corrective tax assessment or provisional fine, so that the relevant documents are included in the case file before it is forwarded to the competent prosecutor for the initiation of criminal proceedings.
The amendment also provides that the relevant documents may be served on the person under audit even during the arrest on the spot. This will be followed by the prescribed procedure for the taxpayer to submit their views and the issuance of the final tax assessment.
Suspension of criminal proceedings until the tax case is concluded
The new regulation also establishes a coordination mechanism between tax administration and criminal justice.
Upon completion of the preliminary investigation, criminal proceedings will be mandatorily suspended until the tax assessment becomes final. This will occur either after the deadline for filing an appeal has expired or after the administrative courts have issued a final decision.
During this suspension, the statute of limitations for the offense will also be suspended, so that serious cases do not go unpunished due to the passage of time.
The new regime will not apply only to cases handled by the DAOE. It will also apply to audits conducted by the AADE, when the findings indicate that tax evasion is part of organized criminal activity.
According to the explanatory memorandum of the amendment, the main objective is to identify and hold accountable the actual organizers of these networks, who until now have managed to hide behind shell companies and “straw men”.
The government believes that the simultaneous initiation of tax and criminal proceedings will enhance the effectiveness of audits, particularly in major cases of VAT and fictitious transactions.
