Tax criminal law in Switzerland: tax fraud and tax offenses

In our second article on the subject of tax criminal law in Switzerland, we explain to you how tax fraud differs from tax evasion, the consequences of this distinction, and what is meant by a tax offense.

Tax Fraud

‍In the last article, we explained to you the facts of tax evasion. This occurs when income or assets are declared incompletely, incorrectly, or not at all. This is done either intentionally or negligently. Tax fraud, which is distinguished especially because of its consequences, is described in Art. 186 of the Federal Direct Tax Act (DBG). The goal of tax fraud is also tax evasion. However, unlike tax evasion, forged, falsified or substantively false documents are used to deceive the fiscal authorities. Examples of such documents include business books, balance sheets, income statements, or payroll statements. Another difference from tax evasion is that fraud can only be committed intentionally. It is not necessary for tax fraud that actually less taxes are paid: The mere submission of the forged, falsified or substantively false documents to the tax authorities is sufficient.

While only fines are imposed for tax evasion, tax fraud can also lead to imprisonment. The procedure is led by the criminal prosecution authorities. Although the penalty-free voluntary disclosure is designed for tax evasion, it also helps in cases of tax fraud. This is because the (additional) punishment of tax fraud is omitted if it was committed for the purpose of tax evasion. However, this is usually the case. If, on the other hand, both tax evasion and fraud are committed, both offenses are punished. Since January 1, 2017, tax fraud becomes time-barred after 15 years. Before that, it was 10 years.

‍Tax Offenses

‍In addition to the more well-known offenses such as tax evasion and fraud, there are others such as tax offenses. They are described in Art. 174 DBG. These involve so-called procedural obligations, which are violated intentionally or negligently. These include, in particular, the failure to submit a tax declaration or the accompanying documents, violating a certification, information, or reporting obligation, or the violation of duties as heirs or third parties in the inventory procedure. However, it is necessary that before the violation of these obligations, the tax authorities have sent a reminder with a deadline, and this deadline has expired unused. Thereafter, a fine of up to 1000 Fr. or in serious cases up to 10,000 Fr. can be imposed. A tax offense is time-barred after three years.

In the next article, you will learn more about the reassessment in the case of a committed tax offense.

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