The statute of limitations for tax crimes is and has always been a controversial issue because it generates many doubts for taxpayers and is also open to interpretation. In relations with the treasury there are no two situations alike, although they may be similar. This article will try to clarify when a tax offence should be considered to have expired and what conditions and characteristics should be met.

Prescription of Debts with the Treasury

The statute of limitations for tax offences

is regulated in the General Tax Law,specifically in article 66. This article establishes a period of 4 years for the prescription of tax infractions.

The debts with the tax administration are not eternal, in fact it is usual for the legislation itself to establish a period in which these crimes prescribe.

In the event that the administration does not initiate any prosecution procedure or any investigation, the crime with the Treasury expires after 4 years.

However, the moment it proceeds to investigate tax crimes with the Treasury or the administration proceeds to sue and initiate a trial, the term is frozen and ceases to compute.

Therefore, in these cases the statute of limitations of the crime does not occur, but the duration of the offense is extended until the trial is resolved.

However, the statute of limitations and the penalties that may arise from non-payment of debts with the administration vary depending on the type of fraud or crime committed.

Types of tax offences:

  • The general tax crime,which involves defrauding an amount greater than 120,000 euros and which usually prescribes after 5 years.
  • The aggravated tax crime,which is one that supposes an infraction for an amount greater than 600,000 euros and that, therefore, implies a prescription of the crime at 10 years.

Tax Fraud Vs Tax Violation: Where’s the Difference?

However, when talking about tax crimes, it is necessary to differentiate by type of crime since the consequences and premises established by the law according to the gravity and type of crime vary significantly. Thus, a crime of tax fraud is not the same as a tax infraction.

The tax infraction consists of a voluntary action that is typified in the legislation.

It is necessary to meet the following requirements to be considered as such:

  1. There must be legislation regulating that infringement and classifying it as an infringement specifying a certain penalty in the case of non-compliance.
  2. There must be a penalty amount for that infringement.
  3. It is necessary that there has been intent at the time of committing the infringement,that is to say, that there has been a clear will to commit the infringement with the consequences that result from it.

Among the infractions that can be typified in the regulations, a distinction is made between minor, serious and very serious offenses,and are usually motivated by not paying the corresponding taxes and obligations to the Treasury. Another cause of violation is the fact of hiding data from the administration.

For its part, the tax offense is considered more serious so that the sanctions applied in these cases carry years in prison.

A crime of tax fraud can be punished with imprisonment between 1 and 5 years in prison and with fines exceeding six times the amount that has been defrauded, as well as the total loss of the right to receive subsidies.

Similarly, in these crimes the right to receive tax incentives for a period of between 6 months and 2 years is also lost.

When does the statute of limitations for tax crimes with the Treasury occur?

A tax crime with the Treasury has a limit period in which the administration stops claiming or requesting it.

These crimes, if they have not been brought to trial or investigated by the Treasury, end up prescribing 4 years from the moment in which the right to comply with the obligation with which it is breached is generated. Therefore, the term description of the Treasury reaches up to 4 years.

Until the debts with the Treasury expire, the debtor will be obliged to pay the amount of the debt that, usually, will be increased in the amount of default interest.

The amount of the offence has a decisive influence on the statute of limitations. Thus, for crimes of amounts greater than 120,000 euros are 5 years,but for amounts greater than 600,000 the term is extended to 10 years.

The filing of an appeal shall not entail a stay of the calculation of the period for the refund of the amount unless it is the judge who decrees the suspension of the calculation of the period.

As seen in this article, debts with the administration, although they have an expiration period, must be attended since the administration can file an appeal that would automatically affect the calculation of the term.