Criminal Law Characteristics of Tax Evasion: Specific Features of Establishing Intent and Proof

Source abstract

This article examines current issues regarding the criminal law characterization of criminal offenses in the field of taxation, as well as the specifics of establishing a person’s guilt and proving the mandatory elements of such offenses. The main focus is on the criminal offense provided for in Article 212 of the Criminal Code of Ukraine—evasion of taxes, fees (mandatory payments). The article examines the specifics of determining the objective and subjective elements of this criminal offense, clarifying the intent of the individual, and establishing a causal link between the individual’s actions and the failure of funds to reach the budgets or state special-purpose funds. Based on an analysis of the Supreme Court’s case law, it is argued that the mere fact of additional assessment of tax liabilities or the identification of violations following a tax audit is not sufficient grounds for concluding that a criminal offense has been committed. The article emphasizes the need to independently establish, within the framework of criminal proceedings, all elements of the offense as provided by law; to verify the validity of the calculation of tax liabilities; to determine the actual amount of mandatory payments not received; and to evaluate the evidence in its entirety. Attention was drawn to the fact that it is impermissible to equate a tax offense with a criminally punishable act without proving the grounds for liability provided for by criminal law. The issue of using tax audit materials in criminal proceedings is addressed separately, specifically tax audit reports, tax assessment notices, source documents, expert opinions, and other information that may have evidentiary value. The importance of the relevance, admissibility, and reliability of evidence is explained, as well as the need to verify the methodology used to determine tax liabilities and the factual circumstances of business transactions that formed the basis for the tax authority’s conclusions. It is emphasized that the tax authority’s conclusions are subject to critical evaluation in light of other evidence, and their content cannot substitute for the establishment of facts that, under criminal procedural law, are subject to proof. It is concluded that a proper criminal-law characterization of tax evasion requires a comprehensive examination of the relevant legal provisions, the factual circumstances of the act, and the evidence gathered during the criminal proceedings. The paper justifies the need to ensure a balance between the protection of the state’s public financial interests and the observance of individual rights, the principle of legality, the presumption of innocence, and the standard of proof beyond a reasonable doubt.