Saturday, 28 July 2012

The Spanish Government increases criminal prosecution for tax fraud

The Cabinet has approved the referral to Parliament a draft law amending the Criminal Code Act relating to tax fraud against Social Security and to create both a subtype to conduct further aggravated severe.

For fiscal offenses aggravated the maximum penalty shall be imprisonment from two to six years instead of one to five years. Moreover, the limitation period becomes ten years versus five years of the remaining cases of tax fraud. The new type of tax offenses aggravated apply if the amount exceeds the amount defrauded six hundred thousand euros or when fraud is committed within a criminal organization or group. Also apply when using business entities or territories that hinder or conceal the identity of the taxpayer or the determination of the amount defrauded.

Moreover, fixing a number of technical improvements designed to encourage voluntary taxpayer adjustment or recovery. These include a mitigating factor (important reduction of sentence) for repairing the financial damage caused to the exchequer. Apply in cases of regularization within the first two months after receiving a subpoena and where the taxpayer to assist in the identification of other responsible persons.

Moreover, empowering the tax authorities not to paralyze a collection procedure for the existence of a criminal trial. At present, requires the express decision of the judge.

Finally, there is a major operation in the event of frames to be not necessary to await the course of the year when defrauding more than 120,000 euros. This may proceed with the complaint immediately. Today should serve as disappointed in the whole calendar year and therefore wait for the completion of it to report it as a tax offense.

The amendment of the Criminal Code defines also new cases of fraud that has been verified that the administrative penalty is not effective enough and that the severity of these behaviors requires a criminal penalty. Such is the case of shell companies and sweatshops.

The special significance of the protected rights (rights of workers and the economic resources of the Social Security) motivates the proposed amendments to the Criminal Code in relation to offenses against Social Security and the rights of workers.

In this line, the maximum penalty harden for defrauding Social Security using shell companies and fictitious, passing sentences of five to six years. This amendment also seeks to extend the period of limitation of five to ten years. A "shell companies" those with no real activity that simulate industrial relations, with the sole purpose of workers to obtain a public service.

It also reduces the minimum amount of the fraud, passing from 120,000 euros to 50,000 euros, and is included in the fee prescribed entire debt in a period of four years. It also penalizes those cases of willful fraud in Social Security benefits to cause serious damage to the heritage of Social Security with the introduction of a new paragraph in this regard.

Source: La Moncloa