Revolution in the Tax Ordinance
The planned change is a fundamental correction in the approach to protecting taxpayers’ rights. Once the new regulations come into force, the initiation of criminal tax proceedings will no longer have an impact on the suspension of the limitation period for tax liabilities. This will limit the possibility of extending the limitation period and, on the other hand, will mean that taxpayers will no longer be exposed to the inconvenience of parallel preparatory proceedings.
However, it should be emphasised that the new regulations will only apply to tax liabilities arising after the amendment comes into force. In practice, most cases concerning tax settlements from previous and current years will continue to be governed by the existing rules. This means that in the coming years, the initiation of criminal tax proceedings will still be able to suspend the limitation period for older tax liabilities.
The draft also includes a proposal to repeal the limitation of the statute of limitations for fiscal offences in connection with the limitation of tax liabilities (Article 44 § 2 of the Fiscal Penal Code). As a result, even if the tax liability becomes time-barred, it will still be possible to conduct criminal tax proceedings and hold individuals liable for irregularities relating to that liability.
In summary, the amendment is a long-awaited change that will increase tax predictability and security, but its practical effects will only be visible in relation to new tax liabilities. Criminal fiscal liability for past violations will remain a current issue. It cannot be ruled out that, as a result of the planned changes, the tax authorities will attempt to find other procedural solutions that will replace the effects of Article 70 § 6(1) of the Tax Ordinance for ongoing proceedings.
We recommend conducting a detailed review of ongoing tax cases, ongoing analysis of limitation periods and assessment of potential risks related to criminal fiscal liability. If you have any questions about the new regulations, please contact our team of tax advisers.
If you have any questions about the new regulations or need assistance with tax risk analysis, please contact our team of tax advisers.