Difference between tax evasion and tax fraud

The topics of tax evasion and tax fraud are of great social and legal importance in many countries, including Switzerland. Taxes are an essential source of revenue for governments, which they use to finance public services and infrastructure. Therefore, correct compliance with tax laws is crucial to ensure the stability and functioning of a society. Tax evasion and tax fraud pose a threat to this system.

Tax Evasion

Tax evasion generally refers to the attempt to avoid or reduce taxes by concealing information from the tax office. This is mainly done by hiding or not declaring money and assets. This reduces the taxable income and assets, thereby also reducing the tax liability.

Consequences:

The penalty depends on various factors, including the amount of taxes evaded and the severity of the violation of the tax laws. The taxpayer must repay the evaded taxes, which can result in significant financial burdens, and in addition, interest may also accrue on the taxes.

Tax Fraud

Tax fraud refers to deliberate actions where false or misleading information is provided to the tax authorities in order to evade taxes. This can include falsifying documents, concealing income, or inventing transactions. The essential difference from tax evasion is that it intentionally deceives the tax administration and submits false, untruthful documents.

Consequences:

Here too, the penalty depends on the amount of tax evaded and the severity of the violation of the tax laws. However, the penalties can be much worse than for evasion. It can even lead to a prison sentence.

Accidentally Evaded Taxes?

Have you realized that you have inadvertently not taxed a bank account or a small income? Don't worry, you can submit a voluntary disclosure to your tax office, which eliminates the penalty payment. However, the evaded taxes and the evasion interest must be repaid within a certain reasonable period.