A fiscal offence is a big example of economic crimes, from which we are looking to protect the public treasury and all economic and social policy.

The Spanish Constitution, in Article 31, stipulates that everyone will contribute to the maintenance of public expenditures through a fair tax system.

A fiscal offence is one of the most genuine examples of economic crimes, from which we are looking to protect not only the public treasury but also all economic and social policy, with an impact on savings, investments, the distribution of national income, among other legal assets.

What is a fiscal offence?

Article 305 of the Criminal Code establishes that who, by actions or omissions, defraud the Public Treasury:

  • Avoiding payment of taxes, quantities withheld or that should have been withheld or advance payments.
  • Or obtaining refunds which don’t apply or receive tax benefits, will be punished with imprisonment from one to five years, and a fine of six times the defrauded amount, also losing the possibility of obtaining subsidies or public aid, and the right to benefits, or tax incentives, or Social Security, during the period of three to six years, provided that the amount exceeds one hundred and twenty thousand euros (120.000 euros).

On the other hand, article 305 Bis of the Criminal Code indicates that you will be punished with imprisonment from two to six years, as well as a fine of twice the six fold of the defrauded amount, and lose the chance of obtaining subsidies or public aid, and the right to benefits or tax incentives, or Social Security, during the period of four to eight years, when the fraud is committed under any of the following circumstances:

  • The amount of the defrauded payment exceeds six hundred thousand euros (600.000 euros).
  • The fraud was committed within an organisation or a criminal group.
  • Using an interposed natural or legal person, business or tax havens.

Among other rules, to determine if the defrauded amount is a criminal offence, whether it is concerning taxes, withholdings, advance payments or returns, or regular declaration, it will be defrauded in each tax or declaration period, and if these are less than twelve months, the defrauded amount will refer to the calendar year.

Can I rectify the situation with Treasury to avoid sanctions?

The criminal sanction could be avoided if the tax situation is considered regularised, meaning the taxpayer has proceeded with full recognition and payment of the debt, prior to the tax administration’s notifications of their actions and proceedings, aimed at determining the tax debts subject to regularisation, or in the event that such actions have not occurred, prior to the prosecutor’s office filing a complaint, or before the prosecutor’s office or the judge carries out proceedings, allowing formal knowledge of the initiation of proceedings.

Additionally, the Courts may impose a penalty one or two degrees below, providing that, within two months of the court summons as investigated, the tax debt is met and the facts have been judicially recognised.

These are only general guidelines. It is recommended that all technical and legal matters pertaining to taxes be referred to a lawyer for advice, guidance and execution.

If you are in doubt whether you could be committing a fiscal offence or if you need help with regularising the situation or representation in Court, contacting with expert Tax Advisors would be a great idea.

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