Courts often encounter a problematic situation, such as in case of failure to submit VAT and income tax reports. On one hand, the state does not fulfill its payment obligations in compliance with tax invoices issued by various business owners. In many cases, business owners pay taxes from their own pockets, while they await the payments that the state of Israel owes them. Such cases cause many business owners are overwhelmed by tax amounts and find it difficult to pay.
Those who avoid paying income tax and VAT are considered tax offenders, however, in many cases, the courts come up with special circumstances of injustice towards the business owners and impose light penalties only. According to Section 24 of the VAT Law, business owners must issue an invoice even if monetary consideration was not received, but in many cases, monetary consideration related to the invoice is received by the vendors from the state months after the invoice was submitted. This situation causes many businesses to collapse. In most of these cases, the offense will be considered as technical only and not as a substantive offense, the penalties for which are much heavier.
Court’s considerations in case of technical offenses
In case of technical tax offenses, we are talking about offenses that were not committed with criminal intentions. It should be noted that offenses considered technical are failure to submit an annual financial statement or a capital statement on time, failure to carry out tax withholding or transfer a tax deducted in compliance with the Income Tax Ordinance. The indictment is submitted via income tax claims and the penalty is up to a year in prison. However, as mentioned above, the punishment depends on the circumstances. If the omissions were corrected, punishment will be much lighter, such as a suspended sentence and fine, or alternatively, an administrative fine following an examination of additional parameters regarding the defendant, such as previous tax offenses, etc.
Handling relationships with the tax authorities
Tax offense cases are usually quite complex and the only recommendation for a person, who encountered financial difficulties, would be not to wait too long. Time is an important parameter for a business owner accused of tax offenses, whether they are technical or substantive. Problems should be solved through legal counseling and representation by an attorney experienced in the field of tax offenses and criminal law. Economic crime experts are well acquainted with the international law and relevant entities, which allows managing the relationship with the Income Tax Authority more efficiently. You can save a significant amount of time and money if you conduct your tax authorities related activities correctly. When an attorney proves that there is no false evidence or other prohibited operations related to the business owner, provided that the person truly believes that the profit from his transactions should not have required reporting or taxation, it would be hard to claim that the person has omitted his income intentionally or maliciously and therefore, he did not intend to evade tax payments.
If you were accused of tax evasion, contact a professional legal firm, such as Ronen Oren & Co. Law Office – experts in the field of tax offenses and well acquainted with the tax authorities, in order to receive professional legal representation throughout the entire process.