Tax Evasion and Co. - These Penalties Threaten Tax Offenders

Nobody likes paying taxes. The temptation not to file a tax return, or at least not to declare all assets, is therefore great. However, cheating on your tax return is not worth it, as Swiss tax laws impose hefty penalties for tax offenders.

Who hasn't thought about cheating on their tax return before? Failing to mention an asset, claiming excessive deductions or not submitting the tax return at all: what could possibly happen? In fact, Swiss tax law defines various criminal offenses to punish tax offenders. Not only tax evasion and tax fraud are punishable, but even minor offenses can be quite costly. Neglecting tax obligations can lead to fines, monetary penalties, or imprisonment.

Violation of procedural duties

Just not filing a tax return once? – That can be expensive. Every tax-liable person in Switzerland is required to cooperate in their tax assessment and assist the authorities in collecting taxes. Due to this obligation, every person who is ordinarily assessed must submit a completed tax return annually. Anyone who fails to do so is guilty of violating procedural duties (Art. 174 DBG). The omission can be punished with a fine up to CHF 1000, in severe cases up to CHF 10,000. In some cases, the fine is higher than the tax itself. Additionally, there's a risk of an excessively high discretionary assessment since the tax authorities estimate the tax owed based on data from the previous year in the absence of a completed tax return.

Tax evasion

Anyone who makes false statements in their tax return and thereby causes the tax to be underassessed or results in an incomplete legal tax assessment commits tax evasion (Art. 175 DBG). Those who obtain an unjustified tax refund or fail to deduct withholding tax are also guilty of tax evasion. The offense of tax evasion is usually punished with a fine amounting to the evaded tax. Thus, an additional fine equal to the owed tax is imposed. In cases of slight negligence, the fine can be reduced to up to one third of the evaded tax amount. In severe cases, an increase to up to three times the owed tax is possible. In the event of a first offense, punishment can sometimes be avoided through voluntary disclosure.

Tax fraud

Crossing off a zero on a salary statement isn't that serious, right? – Think again! Anyone who uses forged, falsified or false documents for tax evasion commits tax fraud (Art. 186 DBG). Whether business records, balance sheets, or wage statements are forged, tax fraud is no trivial offense. Those caught committing tax fraud face a fine, monetary penalty, or imprisonment. In the worst case, tax fraud can be punished with up to three years in prison. Moreover, offenders are most often also penalized for tax evasion.

Even committing minor tax offenses involves serious consequences. The next time you are annoyed about the amount of your taxes, keep in mind that tax evasion and the like are significantly more costly.

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