Tax Violations and Penalties: A Comprehensive Analysis
Tax Violations and Penalties
Principles of Sanctioning Powers in Tax Matters
Offenders and Types of Sanctions
Sanctions: A reaction to the law to prevent people from behaving against the law. For example, you can be punished for parking in a double row, not paying taxes, or stealing. You can also be punished for not doing something, such as not filing an income statement.
Violations and Tax Sanctions: Principles
- Legality
- Typicality
- Responsibility
- Proportionality
- Non-Competition
- Irretroactivity
Legality and typicality are essential. Typicality: The law must regulate and establish what constitutes a crime. No one can be punished for something the law does not prohibit. For a person to commit a crime, it must be recognized by law.
Example: In the penal code, previously, only raping a woman was considered a crime. It was not established for a man, meaning it was not a crime or infraction. Tax offenses are drafted very generally, with very specific sanctions (e.g., €1,000,000 or 1,000 points). However, by 2003, the opposite was established. In some cases, it is difficult to know if a penalty is mild, severe, or very severe.
Principles: Liability (Article 179 LGT)
- Requirement of Fraud (Will) or Guilt: Art. 183.1 LGT: “Tax infringements are acts or willful or culpable omissions with any degree of negligence.”
Tax Violations
To produce an infringement, there must be a degree of culpability. If it is totally unintentional, there will be no infringement.
Infringement
Any instance of negligence, error, etc., constitutes a degree of guilt.
Degree of Fault: Any degree of negligence is a degree of guilt. Example: If we are wrong in an amount, it is already a degree of guilt, even if we reviewed it.
- Causes of Liability Exemption: Art. 179.2 Examples: Exemption from liability in the case of a minor, fire at a business destroying relevant documentation, etc.
- Causes of Liability Exemption: LGT-Regularization art.179.2 as art. LGT-27 Findings of conflict in the implementation of tax legislation (art. 15 LGT)
Concept and Classes of Violations
“Tax infringements are acts or omissions, willful or culpable with any degree of negligence that are classified and penalized as such in this or other law” (art. 183.1 LGT)
Class
New tripartite classification: Mild, Serious, Very Serious.
Concept and Class of Sanctions
Provided for the ordering reaction to criminal law violations, to achieve a general deterrence effect and punish the offender.
Types (art. 185 LGT)
Pecuniary: fixed or proportional. Non-pecuniary are those that are not monetary.
Graduation of Sanctions (art. 187 LGT)
Lessons and Penalties Reduction of Sanctions
- Compliance with the proposed adjustment: reduction of 30%
- Reduced 25% penalty if we enter the penalty-free voluntary deferral period or split and do not take action against the assessment or the penalty
Example: I had to pay €3,000 income tax, but failed to pay €1,000. The regulation of the settlement is €3.00, and the debt I have to pay is €1.00. In this case, we get a penalty for failure to pay, a penalty of 65% à €650.
A: If you resort to liquidation, i.e., we agree to pay €3,000 à 30% discount of the penalty.
B: If uncontested, the sanction that we have not paid (€650), but we agree to pay these €650, we are admitted to a discount of 25% of the penalty if the amount of the penalty is paid earlier.