The act of committing a Tax evasion
Tax evasion is prescribed in the Criminal Code as follows:
Whoever with intent that he/she or another person fully or partially avoid payment of taxes, contributions or other statutory dues, gives false information on income earned, on objects and other facts relevant for determination of such liabilities, or who with the same intent, in case of mandatory filing of returns, fails to report the income earned, i.e. objects or other facts relevant for determination of such liabilities, or who with the same intent conceals in some other manner the information pertaining to determination of the aforementioned liabilities, and the amount of liability evaded exceeds million dinars, shall be punished with imprisonment of one to five years and fined.
The actions of committing the criminal offense of tax evasion are an alternative:
- providing false information on acquired income, items or other facts relevant to the determination of tax liabilities,
- non-reporting of those same revenues or items or other facts that are important for determining tax liabilities,
- concealment of tax liabilities.
What is considered tax evasion?
Not every tax evasion is a criminal offence. The criminal offense of Tax evasion from Article 225 of the Criminal Code sets the amount of 1,000,000 dinars as an objective condition of incrimination, so it is a criminal offense only if the avoided tax liability is above this amount. Otherwise, it is a misdemeanor. In addition, in order for it to be a criminal offense of tax evasion, it is necessary that there is an intention not to pay the tax liability.
What is the period in which the tax liability is calculated?
However, the substance of this criminal offense does not specify the period in which the tax liability is calculated, so from the point of view of the Criminal Code, the question remains whether the tax liability is calculated monthly, quarterly or annually. With this in mind, the answer should be sought in other tax regulations governing the payment of tax liabilities. Thus, the Law on VAT makes the period of obligation to calculate and pay VAT dependent on the amount of revenues generated in the previous period (for example the quarterly period for taxpayers who earned less than 50,000,000 dinars in the previous 12 months, while this tax period is one month for taxpayers who have earned more than 50,000,000 dinars in the previous 12 months).
The Individual Income Tax Law prescribes that the annual personal income tax is paid by the decision of the competent tax authority on income earned in a calendar year, i.e. for a period of one year.
In connection with this issue, it is concluded that there is no universal rule according to which different types of taxes can be classified as tax evasion, but the period in which there is an obligation of the taxpayer to calculate and pay taxes depends on the specific tax, which was also pointed out by the Supreme Court of Cassation in its decision Kzz 942/2018 dated 19 September 2018.