Tax fraud

What exactly is tax fraud?

Under the Dutch State Taxes Act, several types of tax fraud are subject to criminal prosecution. These include intentional or unintentional non-compliance with specific tax obligations, like a failure to keep accounting records as prescribed by law or a failure to provide information, or providing incorrect information. The complete list of tax obligations can be found in Section 68 of the Dutch State Taxes Act. Intentional non-compliance with these obligations has been classified as a criminal offence in Section 69 of this Act.

An intentional failure to submit tax returns or to file the return by the deadline and intentionally filing incorrect or incomplete returns are subject to criminal prosecution. The intentional failure to pay the amount of tax due, either at all or by the deadline, after having submitted the tax return is a relatively new form of tax fraud. This section of the Act specifically targets so-called missing traders, i.e. persons and entities who do file tax returns, but do not pay the tax they owe.

In-depth knowledge of tax law is crucial for mounting a robust defence in tax-related criminal proceedings. What are the limits of Dutch tax law? When is an act considered tax avoidance and when does it qualify as tax evasion? Tax law doctrines like the reasonably arguable position also play a role in criminal law. Our lawyers know all the ins and outs of Dutch tax law and criminal law, which is why they are perfectly placed to defend clients who have been accused of tax fraud. They can draw on their knowledge of the two fields to offer quick and strategic input in any tax proceedings. Please do not hesitate to contact us if you are suspected of tax fraud. We are here to help.

Dutch criminal tax law is unique, not just because of the underlying tax legislation, but also because of other aspects, like shifting, the una via principle, the possibility of voluntary disclosure, the lex specialis -schemes and the fact that a tax loss cannot be recovered in criminal proceedings. These are only a few examples of the unique factors that come into play in criminal tax proceedings. We have provided a brief elaboration below.

From audit to investigation

A routine tax audit may give the tax inspector reason to suspect that there is some form of tax fraud. This will result in a shift from the audit phase (tax law) to the investigative phase (criminal law), bringing with it various legal issues. It is important to remember in this context that, while taxpayers have a number of tax obligations, a taxpayer who is suspected of tax fraud also has certain rights. These rights and obligations tend to conflict.

The shift from tax law to criminal law is a critical point. Have you been advised of your rights as a suspect? What happens if you have not? Our lawyers are familiar with this shift, know what your rights and obligations are and will use them strategically. Please do not hesitate to contact us if you are suspected of tax fraud or if there is a risk that there may be a suspicion of tax fraud emerging following a tax audit.

Fine or criminal prosecution

Failure to file correct or complete tax returns may either result in a fine or in criminal prosecution. Criminal proceedings will be instituted if the failure was intentional or if the amount of tax lost is more than € 100,000. There are cases in which a taxpayer will be prosecuted even if the tax loss is lower. The tax authorities will then engage with the Public Prosecution Service to decide whether criminal proceedings should be initiated or whether a fine would be better. If they do decide to institute criminal proceedings, you may become subject to a tax raid by the FIOD. You can read more about this here .

Dutch law stipulates that the authorities have to choose between criminal law and tax law; this is referred to as the una via (i.e. one route) principle. You cannot, in principle, be fined (under administrative law) and be prosecuted (under criminal law) for the same offence. Have the tax authorities slapped you with a default fine or a financial penalty in the past and are you now a suspect in criminal proceedings? Our specialists know what this will mean for your case and will be able to help.

Voluntary disclosure may prevent prosecution

Voluntary disclosure may, in principle, help you avoid being prosecuted for tax fraud. Voluntary disclosure is subject to conditions and the scheme has been tightened considerably over recent years. You can read more about the voluntary disclosure scheme here on this website page.

No tax fraud and forgery (use of falsified documents)

Dutch tax law dictates that a person cannot be prosecuted for tax fraud and for the intentional use of a falsified or forged document. These two offences can overlap in practice. An incorrect or incomplete tax return may, for instance, be considered a falsified document which you used. Under Dutch law, however, you cannot then be prosecuted for forgery. You can read more about forgery forgery of documents.

Confiscation and tax fraud

Another unique aspect of Dutch criminal tax law is that tax losses cannot be recovered under the law. Our specialists have the requisite expertise and know all the tax consequences of the confiscation of unlawfully obtained gains.This is also an area where criminal law and tax law overlap.

In short, tax fraud calls for knowledge of two areas of law: tax law and criminal law. Given that our lawyers specialise in both fields, they can offer you the best representation if you are suspected of tax fraud and/or if tax proceedings have been brought against you. Please do not hesitate to contact us if you have any questions.