Tax evasion is a serious economic crime in Georgia, which is often revealed as a result of a tax audit of business activities. When non-compliance with tax obligations exceeds a certain monetary threshold, the case moves from an administrative offense to the criminal sphere. Charges can be brought against company directors and founders, as well as accountants and de facto managers. Tax evasion cases are distinguished by particular complexity because they require not only legal knowledge but also a deep understanding of tax legislation, accounting, and financial reporting. Improperly conducted defense can lead to heavy financial penalties, business paralysis, and imprisonment. A qualified lawyer plays a crucial role at this time to distinguish a tax error from an intentional crime.
What does Tax Evasion Defense service cover?
Lawyers specializing in tax crimes offer clients multifaceted services aimed at avoiding or mitigating criminal liability:
- Analysis of tax audit materials: Legal assessment of acts and conclusions drawn up by the Revenue Service, identifying errors and inaccuracies.
- Handling tax disputes: Developing a defense strategy for the criminal case in parallel with the administrative dispute so that one process does not harm the other.
- Conducting alternative audits: Engaging independent auditors to recalculate tax obligations, which often reduces the accrued amount below the criminal threshold.
- Representation in the Investigation Service of the Ministry of Finance: Protecting the client's rights during interrogation and other procedural actions.
- Negotiation on debt restructuring: Negotiating with the state on a schedule for compensation of damages, which can become the basis for terminating the case or a plea agreement.
- Defense in court: Presenting evidence that the action did not contain signs of a crime or that there was no intent.
Common Situations and Scenarios
Charges of tax evasion are often related to the following circumstances:
- Incomplete declaration of income: When a company reflects only part of the actually received income in its accounting, while the rest of the money moves through "off the books" cash.
- Artificial inflation of expenses: Recording fictitious services or purchases of goods from non-existent or "one-day" companies to reduce taxable profit.
- Illegal use of VAT credits: Using fake tax invoices to reduce VAT liability or illegally claim refunds from the budget.
- Refusal to register employees: Paying salaries in cash to avoid paying income tax, which constitutes a criminal offense in large amounts.
- Shortage of inventory: A large shortage revealed as a result of inventory, which the tax authority considers as sales without documents.
Georgian Legislation and Legal Framework
Issues of tax evasion are regulated by the Criminal Code of Georgia and the Tax Code of Georgia. According to the Criminal Code, tax evasion is punishable if the amount of unpaid tax exceeds the "large amount" established by law (currently 100,000 GEL). In the case of a particularly large amount, the punishment becomes stricter. The Law on Entrepreneurs is also important, as it defines the liability of directors. Financial expertise is often used in investigative practice, the rules and methodology of which are established by relevant normative acts. The lawyer's task is to precisely determine whether the action goes beyond the administrative liability provided for by the Tax Code and contains a criminal offense.
Service Delivery Process
The process begins with a deep analysis of the situation, where the lawyer familiarizes themselves with the tax audit act and the company's accounting. If the case is already at the investigation stage, the lawyer gets involved in interrogations and requests case materials. It is often necessary to conduct an alternative audit to determine the real tax liability. The lawyer prepares a position that can be based on either denying guilt or reaching a plea agreement in exchange for compensation for damages. The goal is always to protect the client's best interests, whether it be acquittal or minimizing the sentence.
Why choose a specialist on Legal.ge?
Legal.ge gives you a unique opportunity to connect with lawyers who have dual competence — in both criminal law and tax legislation. Specialists represented on our platform are often former tax officials or investigators, giving them the advantage of knowing the system from the inside. The cost of error in tax evasion cases is very high, so trust only verified professionals. Find the defender of your interests on Legal.ge and protect your business and freedom.
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