Tax Criminal proceedings

We possess extensive practical experience in assisting and guiding clients through challenging situations. We offer comprehensive advice to help you identify and prevent financial penalty risks within your company at an early stage. If these risks have already materialized, we provide support in managing these risks and represent you in proceedings. We offer the following services:

Defense in tax penalty proceedings before tax authorities, adjudicatory panels, the Federal Fiscal Court, and the Administrative Court. In cooperation with legal attorneys, we act as "co-defense" in cases before criminal courts.

Financial penalty assessments, written justifications, access to case files, securing dismissals, expediting procedures, handling appeals

Voluntary disclosures

Searches of premises, seizures, opening of accounts

Reconciliation of tax and financial penalty matters

Risk analysis in financial penalty law

Perpetrator group, corporate responsibility, impending sanctions and liabilities

Effectiveness of voluntary disclosures, determination of the evasion amount

Our recipe for success in many cases is our profound knowledge of tax law. In numerous instances, assessments were imposed following tax audits, leading subsequently to financial penalty proceedings, even when no taxes would have been owed in the specific case, or when the wrong person was billed. We often managed to undermine the basis for financial penalty proceedings by highlighting this procedural aspect.

When Does a Tax Penalty Proceeding Occur?

A tax penalty proceeding is initiated when there is suspicion of untimely or improper payment of taxes. The most common tax offense is tax evasion under § 33 of the Financial Criminal Code (FinStrG). This offense is committed by anyone intentionally violating their obligations under tax law and thereby reducing tax payments.

Tax penalty proceedings are often initiated as a result of tax audits. Each tax audit final report is reviewed by the responsible penal referee and evaluated from the perspective of financial penalty law. Likewise, anonymous reports, tax-related CDs, interrogations during house searches, etc., can trigger financial penalty proceedings.

The consequences in terms of penalties range from fines to imprisonment. Tax evasion is penalized with a fine of up to double the evaded amount. Whoever commits tax evasion on a commercial basis is to be punished with a fine of up to triple the evaded amount. In addition, imprisonment of up to three years is to be imposed, and in the case of an evasion amount exceeding EUR 500,000, imprisonment of up to five years is to be imposed. A person committing tax fraud under § 39 FinStrG is to be punished with imprisonment of up to three years. In addition to imprisonment, a fine of up to one million euros may be imposed. Corporations (GmbHs, AGs, etc.) can be fined up to 2.5 million euros. If a person commits tax fraud with an evaded amount exceeding 250,000 euros, they are to be punished with imprisonment of six months to five years. In addition to imprisonment of up to four years, a fine of up to 1.5 million euros may be imposed. Corporations can be fined up to five million euros.

Anyone committing tax evasion with an evaded amount exceeding EUR 500,000 is to be punished with imprisonment of one to ten years. In addition to imprisonment of up to eight years, a fine of up to 2.5 million euros may be imposed. Corporations can be fined up to four times the determinative value amount.

If the evaded amount exceeds EUR 100,000, the criminal courts are responsible for conducting the tax penalty proceedings, not the tax offices acting as financial penalty authorities.

The route from the court to the financial penalty authority has the advantage that, for example, a case of negligence (if the court denies intent and thus the financial penalty authority becomes competent) is punished less severely than an intentional offense. However, it also has the significant disadvantage concerning conditional mitigation, which is only available in court proceedings, not in proceedings before the financial penalty authority. This is particularly relevant in cases of possible grossly negligent offenses with concurrent evasion amounts far exceeding EUR 100,000. Despite mere gross negligence, substantial fines are possible according to the simple evaded amount and the applicable sentencing practice. Conditional mitigation – available only in court proceedings – is essential in these cases, especially when a corporation is involved (further below). A fine can be conditionally waived by the court under § 26 FinStrG by up to 50%. It should also be noted that, according to the Austrian Act on Administrative Penalties (VbVG), a fine by the court for a corporation can be conditionally waived by at least 1/3 up to 5/6 (with a three-year probation period). However, this provision does not apply to a corporation for which the financial penalty authority is responsible in administrative financial penalty proceedings. This can have significant consequences for corporations in cases of negligence offenses with very high evaded amounts (even though these are generally punished less severely than intentional offenses) for which the financial penalty authority is responsible, as conditional mitigation is not possible.

However, an advantage of the jurisdiction of the financial penalty authority can arise from the statute of limitations in financial penalty law. While there is no absolute statute of limitations in the case of court jurisdiction, criminal liability in administrative financial penalty proceedings expires after 10 years in any case (see § 31 (5) FinStrG – absolute statute of limitations for criminal liability). As a result, older years may fall out of the scope of criminal liability under financial penalty law despite the suspensive effect of § 31 (3) FinStrG, whereas this is not the case when the court is responsible due to the lack of an absolute statute of limitations.

An offense of tax evasion is committed by anyone who commits tax evasion merely through gross negligence. Tax evasion involves the deliberate violation of tax-related obligations. Tax fraud occurs