Law no. 125/2023 regarding the completion of Law no. 241/2005 for preventing and combating the tax evasion

On 22 May, Law no. 125/2023 was published in the Official Gazette, which brings additions to Law no. 241/2005 for preventing and combating tax evasion.

This law transposes art. 3 paragraph (2) letter d) from the Directive (EU) 2017/1.371 of the European Parliament and of the Council of July 5, 2017 on combating fraud directed against the financial interests of the Union by means of criminal law, published in the Official Journal of the European Union, series L, no. 198 of July 28, 2017 (the so-called „PIF directive”).

The aim of the newly introduced provisions is to fight against the most serious form of VAT fraud (e.g., carousel fraud, missing traders, criminal organisations)

Thus, any action or inaction committed within the framework of cross-border fraudulent schemes resulting in a prejudice of at least EUR 10,000,000 (in the equivalent of the national currency) from the resources of the EU budget qualifies as a crime and is punished by imprisonment ranging from 7 to 15 years and the prohibition of certain rights.

The prejudice in EU budgetary resources must arise from the following facts:

1. Using or presenting false, incorrect or incomplete VAT statements or documents;
   
   
2. Non-disclosure of VAT information when it must be disclosed according to law;
   
   
3. Presenting correct VAT statements to fraudulently mask the non-payment or the establishment of the VAT refund right.

The attempted crime is also punished.

Preventing involvement in VAT fraud, knowing your business partners, and the proof of good faith will be critical in those situations where taxpayers could be involved without their will in a VAT fraud scheme.

For more details, please consult the Official Gazette no. 440 published on May 22, 2023.

The EY Team is available for further details on the above.