Fraudulent Declaration

Fraudulent declaration using invoices for non-existent transactions (Art. 2 Legislative Decree 74/2000)

Fraudulent declaration using invoices for non-existent transactions constitutes one of the most serious offences in the area of tax crimes, as it achieves evasion through the use of fiscally relevant documentation capable of artificially altering the taxable base or the tax due.

The regulation is contained in Art. 2 of Legislative Decree no. 74 of 10 March 2000, which punishes anyone who, in order to evade income or value added taxes, indicates fictitious deductible items in the tax return using invoices or other documents relating to non-existent transactions.

The structure of the offence is characterised by a dual dimension: on the one hand, the use of untruthful documentation, and on the other, its transposition into the tax return. The offence is completed upon filing the return and is independent of whether evasion is actually achieved, constituting an offence of danger and mere conduct, in which the harmfulness is anticipated at the moment of fraudulent representation in the declaration.

Non-existent transactions: objective profiles

The concept of "non-existent transaction" is normative in nature and encompasses various hypotheses of divergence between economic reality and documentary representation.

In particular, the following fall within the notion:

• objectively non-existent transactions, when the service was never performed or differs from what is indicated in the invoice;
• subjectively non-existent transactions, characterised by fictitious interposition, use of shell companies or triangulations aimed at concealing the real economic party to the transaction;
• cases of over-invoicing, both quantitative and qualitative, in which the consideration or the tax indicated exceeds the actual substance of the transaction.

What is criminally relevant is not the mere formal irregularity of the document, but the concrete divergence between the actual economic transaction and its fiscal representation.

In criminal proceedings, the distinction between a non-existent transaction and an economically real but irregularly documented transaction takes on decisive value and cannot be based on mere tax-based presumptions. An autonomous evidentiary assessment is required, in accordance with the beyond-reasonable-doubt standard.

The subjective structure: generic and specific intent

The offence requires a dual subjective component.

On the one hand, generic intent, consisting of the awareness of the non-existence – objective or subjective – of the documented transaction and the willingness to use the relevant invoice in the declaration.

On the other hand, specific intent, represented by the purpose of tax evasion, understood as the intention to unduly reduce the taxable amount or the tax due, or to obtain an undue refund or tax credit.

Proof of the evasive intent may be inferred from serious, precise and consistent circumstantial evidence; however, it must pass the beyond-reasonable-doubt test and cannot be based exclusively on administrative presumptions or automatisms deriving from tax assessments.

The assessment of intent, in both its components, therefore requires an autonomous and rigorous evidentiary reconstruction, consistent with the standards of criminal proceedings.

Evidentiary limits in tax criminal proceedings

In tax criminal proceedings, autonomous evidentiary principles apply compared to administrative assessments.

Tax presumptions do not have the value of legal proof in criminal proceedings and cannot be automatically transposed into the trial as the exclusive basis for liability. Similarly, the administrative assessment – although it may constitute an element of evaluation – does not bind the criminal judge, who is required to proceed with an autonomous assessment of the facts.

Liability must be demonstrated on the basis of evidence fully assessable according to the rules of criminal proceedings, in compliance with the beyond-reasonable-doubt principle.

In this context, the distinction between a non-existent transaction and an economically real but fiscally irregular transaction often assumes central importance, constituting the fulcrum of the defence approach and of the verification of the sustainability of the prosecution's case.

Precautionary profiles and confiscation

The significant sentencing framework provided for the offence of fraudulent declaration using invoices for non-existent transactions leads, in practice, to frequent application of personal precautionary measures, as well as recourse to preventive seizure aimed at confiscation by equivalent.

The profit from the offence is normally identified as the tax saving unduly obtained, with consequent seizure of the suspect's assets for a corresponding value.

In this context, the correct determination of the confiscable profit and the verification of the proportionality of the real constraint with respect to the actual tax advantage hypothesised constitute central nodes of the defence strategy.

The analysis must focus on the reconstruction of the actual amount of tax savings and on the traceability of the assets subject to restriction to the suspect's actual availability, in compliance with the principles of legality and proportionality that govern ablative measures.

Entity liability under Legislative Decree 231/2001

The commission of the offence may entail, in addition to the criminal liability of the natural person, also the administrative liability of the entity under Legislative Decree 231/2001, with the application of pecuniary and disqualification sanctions potentially impacting business operations.

In this area, the entity may be exposed to disqualification measures such as the prohibition on contracting with public administration, exclusion from financing or benefits and the prohibition on advertising goods or services, in addition to confiscation of the profit.

Defence management therefore requires structured coordination between the protection of the investigated natural person and the defence of the entity, with particular attention to:

• verifying the interest or advantage of the entity;
• assessing the organisational structure and the prevention models adopted;
• the consistency between individual defence line and corporate strategy.

In tax criminal law, the correct integration between individual criminal defence and entity liability constitutes a central step for safeguarding business continuity.

Our defence strategy

Defence activity in proceedings for fraudulent declaration using invoices for non-existent transactions is based on an integrated approach, combining technical-accounting analysis and legal reconstruction of the case.

In particular, the following is relevant:

• the reconstruction of the entire documentary chain, in order to verify the consistency between economic reality and fiscal representation;
• verifying the economic effectiveness of the disputed transactions;
• analysing the organisational structure of suppliers and the commercial relationships that have taken place;
• challenging the subjective element, with specific reference to the awareness of the non-existence of the transaction and the evasive purpose;
• critical scrutiny of the presumptions used by the prosecution;
• coordination between criminal proceedings and parallel tax litigation.

In an economic context such as Milan's, characterised by high corporate complexity and frequent commercial operations also of an international nature, such proceedings require a technically qualified, expert and timely defence.

The intervention of a lawyer from the Legal Aid – Società tra Avvocati S.r.l. team fits within this perspective: specialist assistance in tax criminal law oriented towards the protection of the entrepreneur and the entity, with particular attention to the correct legal qualification of the facts and the evidentiary sustainability of the prosecution's case.

In tax criminal law, the distinction between administrative irregularity and criminally relevant conduct does not represent a formal datum, but the prerequisite for an effective defence, based on methodological rigour and concrete verification of the evidentiary elements underlying the prosecution's charges.