Fake Invoice

A fake invoice is an invoice issued as if a supply of goods or services took place when none did. Under Art. 359 of the Tax Procedure Law, issuing and using fake documents is a tax evasion offence. It is one of the most common criminal investigations against company managers.

Fake and Misleading Documents

• Fake document: A document issued as if a transaction or situation existed when it did not. Issuers and users face three to eight years’ imprisonment.
• Document misleading as to content: A document that reflects a real transaction or situation but misstates its nature or amount. Issuers and users face eighteen months to three years’ imprisonment.

Investigation

1. Following a tax audit, the tax inspector prepares a tax offence report.
2. The report is sent to the public prosecutor and a criminal investigation begins.
3. At the same time, the tax assessment and tax loss penalty process runs; it may be challenged separately before the tax court.

The criminal and tax processes run independently, but findings in one affect the other, so they should be managed together.

Who Is Held Liable?

For tax offences committed on behalf of legal entities, the natural persons who committed the act are liable. In practice, the company’s legal representatives and persons responsible for accounting are investigated; see Criminal Liability of Managers.

Defence

• Proving a real transaction: Showing that goods or services were actually received through delivery notes, transport documents, stock records, bank payments and correspondence.
• Lack of intent: The buyer may show it did not know, and could not be expected to know, that the seller issued fake documents.
• Supplier checks: Checking new suppliers’ tax registration, address and activity in advance both reduces risk and evidences good faith.

The law also allows effective repentance in tax offences under certain conditions; see Effective Repentance.