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Oliver Appenzeller

Mark Cagienard

Criminal tax proceedings

"Workshop by Oliver Appenzeller and Mark Cagienard on the occasion of the ISIS) seminar of 09 May 2023 entitled "Criminal Tax Proceedings".

The complete PDF of the seminar folder can be downloaded for CHF
The corresponding case solutions can be purchased for CHF
(introductory price)
can be purchased in the shop.
The workshops are also available individually in the "Documents" section.
The case solutions and other documents can be obtained free of charge in the shop.

Case 1: Opening of a criminal investigation

1. facts of the case

X is a partner in a consulting company organized in the legal form of a general partnership and domiciled in Basel-Stadt. He is domiciled in the Canton of Berne. In July 2021, the tax administration of Basel-City conducted an audit of the company's accounts for the tax periods 2017 to 2019 in the course of the assessment procedure of another partner. X was not present during this audit. The Tax Administration Basel-City informed the Tax Administration Bern about the result of the audit and pointed out various inconsistencies (private expenses booked intentionally). Based on this notification, the Bern Tax Administration initiates post-tax and tax evasion proceedings against X for the legally assessed tax periods 2017 to 2019.


- Basic facts: X claims that the initiation of tax evasion proceedings is not justified because he was not present during the audit. What can he do against the initiation of the tax evasion proceedings? How should his arguments regarding his absence from the audit be assessed?

- Variant 1: The tax administration notifies the trustee who submitted documents for X in the 2016 assessment procedure of the initiation of criminal tax proceedings by e-mail. Is the tax administration proceeding correctly? Does the procedure affect the statute of limitations for criminal prosecution for completed tax evasion?

- Variant 2: The tax administration formulates the accusation in the now written letter of introduction as follows: "We are initiating proceedings against you for completed tax evasion relating to the tax periods 2017 to 2019". In addition, X is requested to appear for questioning on a specific date. Linked to this is the request to bring all accounting vouchers. The tax administration made no reference to the procedural rights either in the letter of introduction or during the hearing.

How is the procedure to be appreciated?

- Variant 3: Despite X's intentional actions, the responsible employee of the tax administration considers refraining from conducting criminal tax proceedings because the evaded tax is likely to be less than CHF 10,000. For him, this is a minor amount, since he currently has much more serious cases to deal with. Is he allowed to do this?

- Variant 4: The tax administration learns that proceedings are pending against X at the public prosecutor's office for property crimes and that the public prosecutor's office has presumably had documents edited at the house bank. Can the tax administration inspect the files there?

- Variant 5: A files a voluntary declaration with the tax authorities. He refers to various unrecorded sales with third parties. Among other things, he discloses that he has conducted business with Z AG with his P AG and that the income from this has not been booked. Furthermore, A informs the tax authorities that X (sole shareholder and member of the board of directors of Z AG) operates an elaborate company structure in addition to his general partnership and has numerous dummy companies throughout Switzerland and abroad. In this way, he has been deceiving the tax authorities for years. He documented the denunciation with comprehensive documents. Based on a remark made by an acquaintance, X suspects that A has denounced him to the tax authorities. For this reason, he requests to inspect the files of the tax administration.

Does the tax administration have to grant access to the files? What must be taken into account? What options does the tax administration have with regard to the further procedure?

Case 2: Conducting a criminal investigation

1. facts of the case

A and B were (minority and principal) shareholders and members of the Board of Directors of C.AG, an independent Internet service provider. In June 2008, C. AG was subject to an audit by the Zurich Cantonal Tax Office, in the course of which it was determined that the following items had been recorded as business in the tax periods from January 1, 2002 to December 31, 2005:

- 30th birthday, tax period 2002, total amount Fr. 24'137.-

- Personnel Wellness D., tax periods 2003/2004, total amount Fr. 13'267.-

- Career counseling, tax period 2004, total amount Fr. 2'675.-

- Couple counseling, tax period 2004, total amount Fr. 4'160.-

- Zurich University, tax period 2005, total amount Fr. 7'900.-

At the beginning of 2009, an after-tax and fine order was issued against A and B for tax evasion. Subsequently, on September 14, 2010, the Zurich District Court convicted A and B of multiple tax fraud and multiple document forgery. In the after-tax proceedings, the defendants had stated on the record that the 30th birthday party was "certainly half a company party". It is disputed before the Federal Supreme Court whether the statement from the after-tax proceedings may be used in the criminal proceedings for tax fraud.


- Basic issue: may testimony from after-tax proceedings be used in criminal proceedings for tax fraud?

- Variant 1: The statement was made in the assessment procedure. Does anything change?

- Variant 2: The statement was made casually during a house search, which was ordered as part of the investigation regarding tax fraud. Does anything change?

- Variant 3: A and B have remained ironclad throughout the investigation and have said nothing at all about the background of the alleged company party. Does anything change?

Case 3: Closure of the criminal investigation

1. facts of the case

As secretary of the board of directors (organ) of H AG, A signed its financial statements and balance sheets. H AG was wholly owned by Z (A's father), who was also the sole signatory on the board of directors. H AG rented vehicles from A's sole proprietorship at prices not in line with the market, which was qualified as a hidden profit distribution. For this, H AG was legally fined for completed tax evasion. The tax administration is now also conducting proceedings against Z for completed tax evasion.


- Basic facts: The tax administration waives the initiation of tax evasion proceedings against Z and directly issues a fine order. Is this permissible?

- Variant 1: Z is married. The tax administration addresses the criminal proceedings to both spouses, confronts them with the accusations and finally issues a joint fine. Is this procedure correct?

- Variant 2: Since Z refuses to cooperate in the evasion proceedings, the tax administration imposes costs on Z in the amount of CHF 500. Can Z defend himself against this?

- Variant 3: The tax administration opens the fine order by A-Post Plus to Z's representative. The order is deposited in the post office box on a Saturday. There is a proof of delivery from the post office for this. The legal representative's office notices the order on the following Monday and enters this as the date of delivery. The objection against the penalty order is then received late by the tax administration, which is why the latter does not act on it. Z argues before the Tax Appeals Commission that the service by APost Plus violates the relevant provisions of the Code of Criminal Procedure (Art. 85 para. 2 Code of Criminal Procedure) and the criminal procedural guarantees of the ECHR. The order should have been sent by registered mail and the time limit only started to run from the moment of actual knowledge. Is Z correct?

- Variant 4: The tax administration imposes a fine on Z with a factor of 1/3 of the evaded tax. This is the case even though the tax administration assumes direct intent and planned action. Nevertheless, Z does not agree with the fine, since costs for a birthday party have also been offset. The father takes the case to the cantonal tax appeal commission, but immediately changes his mind and notifies the tax appeal commission of his withdrawal. Is this possible or what is the danger?

- Variant 5: The tax evasion proceedings against Z are concluded with legal effect. Can an additional punishment of A be considered because he acted as an organ for H AG? What would be the consequences of such a punishment?

Case 4: International procedures

1. facts of the case

A moved his residence from the Canton of Obwalden to the Canton of Bern at the end of 2013. In August 2021, the tax administration of the Canton of Obwalden informs the tax administration of Berne that it has received two AEOI reports 2017 regarding accounts at a bank domiciled on the Isle of Man with a total balance of CHF 1 million. The bank details still listed the former address in Obwalden. The Bern Tax Administration, for its part, received notifications for the same accounts only for the tax period 2020. The assessments up to and including 2019 are legally binding, whereby A was assessed with taxable assets of CHF 400,000 and taxable income of between CHF 80,000 - 100,000 in each of the periods 2013 - 2019. The Bern Tax Administration determines that the two accounts have not yet been declared and thereupon initiates subsequent and tax evasion proceedings against A regarding the tax periods 2013-2019.


- Is the forwarding of the AIA report to the Canton of Berne legal?

- A informs the tax administration in the tax evasion proceedings that he will not submit any documents. What can the tax administration do?

- Does anything change when the reported accounts total a balance of CHF 10,000?

- The tax administration initiates an international request for administrative assistance. Can A defend itself against such a request?

Variant 1:

In the course of investigating A's banking information, the competent authorities of the Isle of Man discover that A has never declared income from a rented property on the Isle of Man. The competent authorities open criminal proceedings for tax evasion. A complains that the information provided to Switzerland may not be used for domestic proceedings. It is assumed that the legal situation corresponds to that in Switzerland.

Variant 2:

The requested account is not held by A personally, but via a domiciliary company on the Isle of Man. The Bern Tax Administration requests via the SEI that information on the shareholder, in particular the share register, as well as information on the beneficial owner of the domiciliary company be provided. Can the local fiduciary mandated directors of the domiciliary company object to the transmission of information in the context of a complaint on the grounds that the information on the shareholders is confidential? If not, is there a risk that the information provided will be used in local criminal proceedings against the directors? Assume that the legal situation is the same as in Switzerland.

Variant 3:

The domiciliary company, which is the account holder, is not held directly by A but through a trust. The Bern Tax Administration requests information on who the beneficiaries of the trust are as well as information on the account held by the domiciliary company. From A's point of view, this information does not have to be provided because it is a non-transparent trust. Does anything change? Assume that the legal situation is the same as in Switzerland.


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