The battle against organized tax evasion is entering a new phase, as the Ministry of National Economy and Finance has submitted an amendment to parliament establishing fast-track procedures for conducting tax audits, imposing taxes and fines, and launching criminal prosecutions in cases linked to criminal organizations.
Tax evasion: What changes in tax audits and criminal prosecutions
The government is moving to tackle one of the most persistent problems of recent years: organized networks that use shell companies, fictitious invoices, straw men, and complex corporate structures to conceal the true beneficiaries of large-scale tax evasion, primarily in VAT fraud. The philosophy behind the new regulation is that tax and criminal proceedings will no longer run on separate, disconnected tracks, but will instead advance in parallel — reducing the delays that have allowed many cases to remain unresolved for years.
At the heart of the new framework is closer cooperation between the Organized Crime Response Directorate (DAOE) and the Independent Authority for Public Revenue (AADE). When evidence of felony-level tax evasion linked to a criminal organization emerges, the DAOE will be able — following a prosecutor’s order — to complete its investigation and transmit its findings directly to the Tax Administration.
The AADE will then issue without delay a provisional corrective tax assessment or provisional fine, which will be incorporated into the case file before it reaches the prosecutor for criminal charges. Of particular significance is that the provisional tax or penalty assessment will be served on the individual under investigation even during flagrante delicto proceedings. This will be followed by the standard procedure allowing the taxpayer to submit their views, after which a final tax assessment act will be issued.
How the statute of limitations on tax offenses will be “frozen”
The amendment also provides that once the preliminary investigation is complete, criminal proceedings will be mandatorily suspended until the tax act is finalized — either upon expiry of the appeals deadline or following a final, irrevocable ruling by the administrative courts. For the duration of this suspension, the statute of limitations on the offense is also “frozen,” ensuring that serious cases are not lost simply due to the passage of time. The new procedure will apply not only to DAOE investigations, but also to audits conducted by AADE services, whenever those audits reveal indications that tax evasion is connected to the activities of a criminal organization.
According to the explanatory report accompanying the amendment, the primary objective is to identify the true masterminds behind these networks — individuals who until now have frequently evaded justice by using fictitious businesses and proxy persons to conceal their identities. The government believes that faster coordination between tax audits and criminal proceedings will boost the effectiveness of prosecutions and make it significantly harder for organized tax evasion networks to operate, particularly in cases involving large-scale VAT fraud and fictitious transactions.
