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Penalty procedures/Co-perpetrator penalties


Penalty procedures

Tax assessments can include high penalties (Section 67a et seq., General State Taxes Act). Has a penalty been imposed on you? If so, you first need to establish what type of penalty it is.


You may have to pay a default penalty if you file a tax return late or do not file it at all (Sections 67a and 67b, General State Taxes Act) or if you make late or no payment of tax due (Section 67c, General State Taxes Act). Default penalties are currently set at a maximum of around €5,000.


If the tax authorities believe, however, that you have intentionally filed a tax return late or not at all (Section 67d, General State Taxes Act) or that you have intentionally or grossly negligently caused a too low tax assessment to be issued (Section 67e) or intentionally or grossly negligently paid no or too little tax or paid tax late (Section 67f), payment of a negligence penalty may be demanded. Such a penalty is demanded in the event of a serious accusation. These penalties can amount to as much as 100% of the additional tax demanded or imposed. And in the case of undeclared savings, penalties can be as high as 300% of the additional tax demanded. In other words, major interests are at stake in the case of negligence penalties.


A penalty is normally imposed at the same time (and in the same decision) as the additional tax demanded or imposed. The penalty procedure will usually, therefore, be conducted at the same time as the objection to or appeal against the tax demand. Nevertheless, penalty law has its own regulations and is closely related to criminal law. This is particularly relevant with regard to the rules of evidence and culpability, with the rules applying to tax returns differing from those applying to penalties. Evidence in criminal law – and so also in penalty procedures – is more likely, for example, to be regarded as having been obtained unlawfully, and so excluded, than in purely tax matters. It is also possible to attribute guilt or intent to another person in the case of an incorrect tax return, whereas this is inconceivable in the case of penalties. There is also the possibility to object to the level of the penalty imposed.


In penalty procedures it is consequently vital to have a proper understanding and experience of both tax and criminal procedural law. A penalty is not only a nuisance because of the culpability and amount of money involved, but can also be an obstacle hindering you in your career or positions you may hold in society. Our attorneys know all the ins and outs of penalty law and will be pleased to advise and support you.


Penalties for co-perpetrators/aiders and abettors

The fourth tranche of the General Administrative Law Act came into force in mid-2009. Since then, it has also been possible to impose negligence penalties on people participating in committing an offence and on factual leaders (Section 5:1, General Administrative Law Act). And the opportunities to demand penalties were extended further in 2014. Under the General State Taxes Act, penalties can now also be imposed on people committing an offence and on those inciting or aiding and abetting them (Section 67o). These forms of participating in an offence derive from criminal law. In such situations, therefore, it is equally important to have in-depth knowledge and experience of criminal law.


More and more use has been made since 2015 of the opportunity to impose co-perpetrator penalties. As a result, we have gained experience in handling procedures involving penalties that have been announced or imposed on consultants and accountants.


Our years of experience in criminal law mean we are effective in defending the interests of ‘participants’. And so we can also avoid the pitfalls that your work for your clients can involve, including the possibility of opposing interests being at stake, and can invoke an arguable case.