How to manage fiscal criminal liability

Criminal tax law requires knowledge not only of legal and criminal processes but also of finance and tax law. As someone with over 20 years of experience in taxation and a tax advisor title, I understand the specific nature of tax-related issues. It is crucial to prevent criminal proceedings before they reach court, as awareness of tax specifics varies among judges. Therefore, proactive measures are preferable to fighting in court.

Key Aspects of Managing Criminal Tax Liability

1. Defining Responsibilities in Financial Departments

• Clearly delineating the roles and responsibilities within financial teams is fundamental for determining who bears specific liabilities. This approach helps mitigate personal liability risks, especially if tax authorities later assess a different tax obligation than initially declared.

2. Implementing Procedures

• Under Polish law, individuals managing a company can be held criminally liable. Thus, it is essential to exercise due diligence by establishing clear operational procedures within the company to prevent potential infractions.

3. Formulating Strategies for Tax Audits

• Due to changes in the criminal tax code, not all corrections made after a tax audit will exempt one from criminal liability. It is vital to accurately assess the risk of incurring criminal responsibility if an audit is underway and suspicions arise that things may not proceed favorably.

4. Avoiding Escalation

• It is important to utilize all available options to resolve disputes before formal charges are brought to court. One should evaluate whether active repentance can effectively mitigate liability and ensure voluntary submission to responsibility if possible. Neglecting this area can lead to severe consequences.

5. Proactive Defense in Case of Joint Liability

• If a company faces joint liability, it should take active steps since often the company itself possesses the resources necessary for an effective defense rather than individual executives like the CFO or chief accountant. In such cases, an attorney should represent the company and implement an appropriate defense strategy tailored to the situation

By focusing on these aspects, companies can better manage their exposure to criminal tax liability and navigate the complexities of tax law effectively.