Measures to combat tax evasion: Law no. 126/2024

The takeaway 

Law no. 126/2024 introduces greater penalties for acts that constitute tax evasion offenses resulting in damages representing VAT owed to the state budget, and it criminalizes new acts of tax evasion for situations in which taxpayers do not use national IT systems such as RO e-Transport, RO e-Invoice, e-fiscal registers, the electronic seal of goods and SAF-T.

Special cases of non-punishment have been introduced for cases in which the damage caused does not exceed the RON equivalent of EUR 1 million.

The act of not withholding tax obligations at source has been criminalized and prison sentences introduced.

In detail

Law no. 126/2024 completes the definition of legal documents, and the electronic invoice issued, transmitted and received through the RO e-Invoice national system is included in the category of legal documents.

New facts have been defined as constituting tax evasion crimes:

The following offense is punishable with imprisonment for one to five years or by a fine:

• Non-withholding of taxes and/or contributions provided for in the Annex to the Evasion Law.

The following offenses are punishable with imprisonment for three to ten years and the prohibition of certain rights or with a fine:

• The recording in accounting documents, the electronic invoice or other legal documents of expenses that are not based on real operations and the recording of fictitious operations.

• The alteration, destruction or concealment of accounting documents, memories of toll machines or electronic fiscal marking machines or other means of data storage, including electronic ones.

• The development of double accounting records using documents or other means of data storage, including electronic ones.

• Crediting directly or indirectly by any individual, with the aim of making payments with sums of money that come from the omission of recording in the accounting documents the operations and/or the incomes achieved.

It is also an offense for taxpayers to use, in bad faith, the national RO e-Invoice system to create the appearance of legality of some fictitious operations or to disguise the real transactional circuit of goods/services, the use of electronic fiscal marking devices that are not connected to the national IT system for the supervision and monitoring of fiscal data, and the alteration of electronic fiscal marking machines to avoid transmitting fiscal data or to transmit false fiscal data. If the damage caused by these acts is greater than the equivalent in RON of EUR 500,000, the minimum and maximum limit of the punishment increases by three years. If the damage caused is greater than the equivalent in RON of EUR 1 million, the minimum and maximum limit of the sentence increases by five years.

The following acts that have the effect of reducing the resources of the state budget by at least the equivalent in RON of EUR 1 million are also offenses:

• Using or submitting false declarations or documents, false, incorrect or incomplete VAT electronic documents.

• Intentional non-disclosure of VAT information when such information is required to be disclosed by law.

• Submitting correct declarations or correct electronic VAT declarations to fraudulently mask non-payment or establishment of improper rights to VAT refunds.

Attempting any of those acts is also a punishable offense.

If the damage does not exceed the equivalent in RON of the sum of EUR 1 million, special situations are provided for in which the act will not be punished and criminal prosecution will not be sought:

• If by the expiry of the maximum period of 30 days from the completion of the inspection carried out by the fiscal bodies that found the existence of damage not exceeding the amount of EUR 1 million, the taxpayer pays the damage in full, plus 15%, the related interest and penalties, the deed is not punishable, and the fiscal authorities do not notify the criminal prosecution authorities.

• If during the prosecution, the damage plus 25%, interest and penalties is paid in full, the act is not punished.

• If during the procedure of the preliminary chamber or the trial, until a judgment is rendered in the first instance, the damage plus 50%, interest and penalties is paid in full, the act is not punished.

• If on appeal, until a final court decision is issued, the damage plus 100%, interest and penalties is paid in full, the act is not punished.

If by the first term of the court the damage caused (without the legal text referring to the ceiling of EUR 1 million) is fully covered, the limits of the punishment provided by law are reduced by half. If the damage caused is fully covered after the first court term and until the final judgment is issued in the case, the punishment limits for the act are reduced by one third. If the damage caused and recovered under these conditions is up to EUR 1 million, it is possible for the penalty to be applied with a criminal fine.

The statute of limitations for criminal liability for the acts provided for by Law no. 126/2024 starts from the date of notification to the fiscal body or from the date of notification to the criminal prosecution body but no later than ten years from the date of the crime.

The National Anticorruption Directorate is responsible, regardless of the person’s status, for tax evasion crimes that caused a loss of more than RON 10 million.

Source: [Law no. 126/2024 regarding some measures for strengthening the capacity to combat tax evasion, as well as for the modification and completion of some normative acts, published in the Official Gazette no. 437 dated 13 May 2024]