{"id":32439,"date":"2021-12-16T20:07:46","date_gmt":"2021-12-16T18:07:46","guid":{"rendered":"https:\/\/www.cins.rs\/?p=32439"},"modified":"2021-12-23T21:26:10","modified_gmt":"2021-12-23T19:26:10","slug":"tax-evasion-a-crime-that-pays-off","status":"publish","type":"post","link":"https:\/\/www.cins.rs\/en\/tax-evasion-a-crime-that-pays-off\/","title":{"rendered":"Tax Evasion \u2013 A Crime That Pays Off"},"content":{"rendered":"<p>The director of <em>Sigurnost Vra\u010dar<\/em>, a Belgrade-based company offering private security services, did not pay taxes and contributions for his employees\u2019 social insurance for four years. In October 2020, he was convicted of tax evasion in the amount of 110 million dinars.<\/p><p>The <em>First Basic Court<\/em> in Belgrade sentenced the director to seven months of house arrest and a fine of 50,000 dinars.<\/p><p>The director and founder of the <em>Globo Autohaus<\/em> company from Belgrade was also sentenced, in the spring of 2015. He had sold 45 used cars imported from Austria, Switzerland and Croatia, but did not report the total earnings. In addition to those, he also sold some vehicles for cash, bypassing the company account.<\/p><p>The evasion of 19.8 million dinars of taxes would have resulted in a year-long prison sentence, if he did not repeat the criminal offense over the next four years, and he also had to pay a 400,000 dinar fine.<\/p><p>These cases are not exceptions. Research conducted by the <em>Center for Investigative Journalism of Serbia<\/em> (CINS) shows that the basic courts in Belgrade in 300 proceedings from early 2011 to July 2021 convicted 372 individuals of the felony of tax evasion.<\/p><p>The biggest number of proceedings, 249 of them, ended with a prison sentence, along with fines with the median value of 80,000 dinars. In these proceedings, the defendants had evaded taxes totaling roughly three billion dinars.<\/p><div class=\"fullws\"><iframe src='https:\/\/flo.uri.sh\/visualisation\/8215025\/embed' title='Interactive or visual content' class='flourish-embed-iframe' frameborder='0' scrolling='no' style='width:100%;height:600px;' sandbox='allow-same-origin allow-forms allow-scripts allow-downloads allow-popups allow-popups-to-escape-sandbox allow-top-navigation-by-user-activation'><\/iframe><div style='width:100%!;margin-top:4px!important;text-align:right!important;'><a class='flourish-credit' href='https:\/\/public.flourish.studio\/visualisation\/8215025\/?utm_source=embed&utm_campaign=visualisation\/8215025' target='_top' style='text-decoration:none!important'><img alt='Made with Flourish' src='https:\/\/public.flourish.studio\/resources\/made_with_flourish.svg' style='width:105px!important;height:16px!important;border:none!important;margin:0!important;'> <\/a><\/div><\/div><p>A certified fraud examiner, <strong>Ivan Raoni\u0107<\/strong>, finds the penalties \u201cscandalous\u201d and thinks they should be very severe for such a criminal offense. He offered a metaphorical explanation:<\/p><p>\u201cA man got eight years in prison for two stolen car batteries worth 10,000 dinars, while a man who evaded [taxes worth] 10 million gets nothing.\u201d<\/p><div class=\"antrefile-container\"><div class=\"antrefile\"><div class=\"antreimg\"><img decoding=\"async\" src=\"https:\/\/www.cins.rs\/wp-content\/uploads\/2021\/12\/Ivan-Raonic.jpg\"  \/>\n            <figcaption class=\"wp-caption-text\">Ivan Raoni\u0107; photo: private archive <\/figcaption>\n            <\/div><div class=\"antrefilecont\"><\/div><\/div><\/div><p>He recalled that the limit for tax evasion being considered a felony had been raised from 150,000 dinars in 2016 to 500,000 and then to one million in late 2019.\u00a0Everything below this sum is considered a misdemeanor and the penalties are much lighter.<\/p><h2>Plea bargains a frequent occurrence<\/h2><p>The majority of tax evasion suspects in Belgrade never stood trial, CINS\u2019 research shows. Instead, the accused sign a plea bargain at the prosecutor\u2019s office, which the courts simply confirm.<\/p><p>More than two thirds of the verdicts CINS analyzed were reached in this way. Out of 372 defendants, prosecutors made plea bargains with 219.<\/p><div class=\"antrefile-container\"><div class=\"antrefile\"><h2 class=\"antretitle\">The same penalty practice in the rest of Serbia<\/h2><div class=\"antrefilecont\"><p>Although Belgrade is the leader in the number of tax evasion cases, the penalty practice is the same in other Serbian cities and towns.<\/p>\n<p>Over the past 10 years, 103 verdicts have been reached by the Basic Court in Ni\u0161, of which 65 proceedings ended with suspended prison sentences. Just three plea bargains were made. In Novi Sad there were 148 verdicts, 113 of which included a suspended prison sentence and a fine. Eighty-three plea bargains were made.<\/p>\n<p>Courts in Kru\u0161evac, Pan\u010devo, Leskovac, and U\u017eice are also prone to suspended sentences.<\/p>\n<p>How many cases the <em>State Attorney\u2019s Office<\/em> has initiated for tax evasion refunds in these cities is unknown because, as Office representatives put it, these are archived cases that they are unable to browse. The local courts also claim that they do not have these data or that such litigation never took place.<\/p>\n<p>In the period from 2011 to 2021, the Tax Administration filed more than 8,000 criminal charges for tax evasion in the territory of Serbia.<\/p>\n<p>\u00a0<\/p><\/div><\/div><\/div><p>One of the plea bargains CINS journalists got access to states that a former owner of popcorn vending chain <em>Pe\u0107ina<\/em> did not report the company\u2019s entire turnover for almost three years. In that way he evaded taxes in the amount of 28.7 million dinars.\u00a0After he pleaded guilty, the <em>First Basic Court<\/em> sentenced him to a year in prison, i.e. three years on probation, with the obligation of paying 100,000 dinars into the budget. The verdict did not order him to pay the debt totaling close to 29 million dinars.<\/p><p>It is exactly this practice that a former state secretary at the <em>Ministry of Justice<\/em> and a plea bargaining expert, <strong>Danilo Nikoli\u0107<\/strong>, sees as the problem.<\/p><p>\u201cCourts should not accept a plea bargain unless it was decided that the defendant would return the tax. It is even preferable in those negotiations that they pay the entire amount of evaded taxes prior to concluding an agreement,\u201d said Nikoli\u0107.<\/p><div class=\"fullws\"><div style=\"position: relative; width: 100%; height: 0; padding-top: 75.0000%;\n padding-bottom: 48px; box-shadow: 0 2px 8px 0 rgba(63,69,81,0.16); margin-top: 1.6em; margin-bottom: 0.9em; overflow: hidden;\n border-radius: 8px; will-change: transform;\">\n  <iframe loading=\"lazy\" style=\"position: absolute; width: 100%; height: 100%; top: 0; left: 0; border: none; padding: 0;margin: 0;\"\n    src=\"https:&#x2F;&#x2F;www.canva.com&#x2F;design&#x2F;DAEzYooLLog&#x2F;view?embed\" allowfullscreen=\"allowfullscreen\" allow=\"fullscreen\">\n  <\/iframe>\n<\/div>\n<a href=\"https:&#x2F;&#x2F;www.canva.com&#x2F;design&#x2F;DAEzYooLLog&#x2F;view?utm_content=DAEzYooLLog&amp;utm_campaign=designshare&amp;utm_medium=embeds&amp;utm_source=link\" target=\"_blank\" rel=\"noopener\"><\/a> <\/div><p>Fraud examiner Ivan Raoni\u0107 believes that the defendants would not agree to plea bargains if they also contained the item of evaded tax. That is why, in his opinion, prosecutors do not even offer that to suspects.<\/p><p>\u201cAgreements are signed because the outcome of litigation is uncertain, because there is a threat of the statute of limitations being exceeded. In criminal proceedings before a court, that goes very slowly and it is very difficult to prove tax evasion as a felony,\u201d Raoni\u0107 explained.<\/p><h2>What amount of evaded taxes is collected<\/h2><p>There are multiple ways for a debt stemming from tax evasion to be poured into the budget. Aside from the possibility of pointing it out in a verdict, collection is also carried out by the <em>Tax Administration<\/em>, which, when it detects tax fraud, initiates the mechanism of enforced collection, or the <em>State Attorney\u2019s Office<\/em> launches civil proceedings at the proposal of the prosecutor\u2019s office.<\/p><p>Representatives of the <em>State Attorney\u2019s Office<\/em> told CINS that the competent prosecutors\u2019 offices had notified them of 194 cases \u2013 out of the 300 verdicts reached in Belgrade over the last 10 years. Out of that number, the <em>Attorney\u2019s Office<\/em> launched just 28 proceedings.<\/p><p>What the outcome of those proceedings was and how much money was actually returned to the budget is unknown because both the <em>State Attorney\u2019s Office<\/em> and the <em>Tax Administration<\/em> told us they did not have those data.<\/p><p>Representatives of local branches of the <em>State Attorney\u2019s Office<\/em> said they had no way of searching through the cases.<\/p><p>Representatives of the <em>Tax Administration<\/em>, which the journalists were directed to by the <em>State Attorney\u2019s Office<\/em>, replied that they did not have documents containing information on how much money they had collected through enforced collection, nor to what extent evaded taxes had been successfully collected through civil proceedings. Where the latter is concerned, according to them the ball is in the court of the <em>State Attorney\u2019s Office<\/em>.<\/p><p>\u201cBearing in mind that the <em>State Attorney\u2019s Office<\/em> represents the Republic of Serbia before the competent courts, i.e. the <em>Ministry of Finance<\/em> [represents] the <em>Tax Administration<\/em>, the requested data and records are in the files of the <em>State Attorney\u2019s Office<\/em>,\u201d said the <em>Tax Administration<\/em> representatives.<\/p><div class=\"rmbox\"><div class=\"rmboxteaser\"><p>Thank you for reposting CINS articles! When doing so, you need to state that you have taken the<strong> story over from the Center for Investigative Journalism of Serbia, and provide a link to the article you are reposting.<\/strong><\/p>\r\n<p><strong>More information at: <a href='\/en\/terms-of-use\/' target='_blank' rel='noopener'>cins.rs\/en\/terms-of-use<\/a><\/strong><\/p><\/div><\/div>","protected":false},"excerpt":{"rendered":"<p>To avoid paying taxes, company managers use various tricks \u2013 among other, they do not issue fiscal receipts to buyers or do not pay contributions for their employees. Their tax evasion often amounts to millions, but even when the authorities catch them \u201cwith their hand in the cookie jar,\u201d they pass with minor penalties. Most are handed down a suspended prison sentence, while the amount of tax debt the authorities have managed to collect remains unknown.<\/p>\n","protected":false},"author":1352,"featured_media":32440,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1492,1595],"tags":[1650,2102],"class_list":["post-32439","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investigative-stories","category-justice","tag-preugovor-en","tag-tax-evasion","ciTrackContent"],"acf":[],"featured_image_url":"https:\/\/www.cins.rs\/wp-content\/uploads\/2021\/12\/Illustration.jpg","author_additional":[1366],"_links":{"self":[{"href":"https:\/\/www.cins.rs\/en\/wp-json\/wp\/v2\/posts\/32439","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cins.rs\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cins.rs\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cins.rs\/en\/wp-json\/wp\/v2\/users\/1352"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cins.rs\/en\/wp-json\/wp\/v2\/comments?post=32439"}],"version-history":[{"count":10,"href":"https:\/\/www.cins.rs\/en\/wp-json\/wp\/v2\/posts\/32439\/revisions"}],"predecessor-version":[{"id":32454,"href":"https:\/\/www.cins.rs\/en\/wp-json\/wp\/v2\/posts\/32439\/revisions\/32454"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.cins.rs\/en\/wp-json\/wp\/v2\/media\/32440"}],"wp:attachment":[{"href":"https:\/\/www.cins.rs\/en\/wp-json\/wp\/v2\/media?parent=32439"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cins.rs\/en\/wp-json\/wp\/v2\/categories?post=32439"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cins.rs\/en\/wp-json\/wp\/v2\/tags?post=32439"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}