April 2023

Criminal tax fraud offenses are covered by the Tax Offenses Act (Sw. Skattebrottslagen). Please find table below for description of offenses included in the Tax Offenses Act.

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There is no threshold amount that automatically triggers criminal proceedings. However, incorrect statements in the application for adjustment may constitute a tax accounting offense, triggering criminal charges. Statements can be deemed incorrect e.g., if a valuation of an asset (made for adjustment purposes) deviates significantly from the value deemed to be the correct one (RÅ 1999 ref. 17). Whether or not a deviation is considered "significant" depends on how difficult it is to determine the assets market value (RÅ 2004 not. 176). If there are many uncertain factors that can affect the value, a larger difference can be accepted than when the valuation range is more limited (RÅ 2007 not. 115). In this sense, large adjustments can sometimes constitute incorrect statements, and therefore trigger criminal proceedings for tax fraud. However, there is no set value for this; a statement is deemed incorrect on the basis of a number of factors.

Furthermore, criminal proceedings usually aren't initiated if the amount of withheld/unpaid taxes is below a certain amount (Tax Offenses Act, Section 13). The Tax Offenses Act is based on a system of threshold values. These thresholds relate to the amount of tax or duty that the taxpayer is suspected of having withheld/not paid, and are based on the "price base amount", which is adjusted every year.  In 2023, the price base amount is SEK 52,500 (cf. Social Insurance Code Chapter 2, Sections 6-7). For reference, the threshold between ordinary and serious tax offenses is generally ten price base amounts (in 2023, SEK 525,000) (Tax Offenses Act, Section 4).

If the unpaid quota is below the value of two price base amounts of the year the crime was committed (in 2023, SEK 105,000), criminal proceedings may generally only be initiated if (i) the actions potentially subject to prosecution may also be subject to decisions regarding tax penalties and (ii) there are special reasons. Special reasons includes for example repeat offenses (Tax Offenses Act, Section 13).

Since the amount of taxes withheld/unpaid is only finally determined by the courts, the prosecutor deciding whether to initiate criminal proceedings must make an assessment of whether the amount withheld/unpaid might exceed the threshold, and if not, whether there are special reasons to initiate criminal proceedings anyway (Tax Offenses Act, Section 13).

No, application of tax penalties prevents the initiation of criminal proceedings (Tax Offenses Act, Section 13 b). It should be noted that the STA (and other authorities) is obligated to report to the prosecutor's office if there is a reason to assume that tax fraud has been committed (Tax Offenses Act, Section 17). Consequently, it is unlikely that tax penalties would be applied prior to initiation of a criminal proceeding. Furthermore, if a report has been submitted as described above, the STA is prohibited from applying tax penalties until a decision is made by the prosecutor to (i) not initiate an investigation, (ii) end an investigation, (iii) limit the investigation to circumstances other than those that gave rise to the report, or (iv) not file an indictment (cf. Tax Procedures Act, Chapter 49, Section 10 a).

However, there is nothing that prevents combining tax penalties together with criminal proceedings regarding tax fraud offenses as long as the penalties are not combined against the same person (NJA 2013 s. 502). That means the individual being prosecuted for tax crimes may not receive both punishment for that crime and the tax penalty. Nothing prevents the individual to be sentenced for tax crimes and the company to have tax penalties levied against it also. If they are combined, the tax penalty shall be levied by the court upon request from the prosecutor, instead of by the STA (Act on Tax Penalty Proceedings in certain cases, Sections 6-8. Sw: Lag (2015:632) om talan om skattetillägg i vissa fall). If tax penalties and criminal punishments are combined, this must be noted during sentencing.

Criminal intent is not always required to give rise to a criminal offense. Many tax fraud offenses can result in criminal liability on the basis of gross negligence. Please refer to the table in Question 1 for different tax offenses, as well as requirements regarding criminal intention etc.

A person who, on their own initiative, takes action which results in the tax being levied, credited or refunded in the correct amount shall not be held liable for criminal offenses resulting from previously provided incorrect information (Tax Offenses Act, Section 12). An action is not considered to have been taken on an individual's own initiative if (i) the STA has informed that it will be conducting a general audit, (ii) the action is related to the general audit, and (iii) the action is not taken before two months after the end of the month in which the STA informed about the general audit. In other words, an action is considered to have been taken on an individual's own initiative if the correction is carried out without the individual having felt compelled by external circumstances.

The provision should apply irrespective of when and how the correct assessment or crediting of tax can be executed (Tax Offenses Act, Section 12). It is therefore irrelevant whether the individuals action results in the correct charge within the normal assessment and charging procedure or whether the action results in post-taxation.

A prosecutor may initiate a criminal proceeding for tax fraud, provided that they have conducted an investigation and determined that a tax fraud offense has been committed. If the prosecutor, following an investigation, is of the opinion that an offense has been committed an indictment may be filed with the competent court.

As a general rule, authorities that handle issues regarding taxes and other equivalent fees (e.g., the Swedish Tax Agency ("STA")) shall report to the prosecutor as soon as there is reason to believe that tax fraud has been committed (Tax Offenses Act, Section 17). This is usually what triggers an investigation. Alternatively, an investigation can be launched following a tip from other authorities or individuals.

The obligation for authorities to report on potential offenses as described above is not applicable in the event it can be assumed that the suspected offense will not lead to any sanctions pursuant to the Tax Offenses Act (Sw. Skattebrottslagen (1971:69)), or if a report is otherwise not required (Tax Offenses Act, Section 17, second sentence.). A report does not need to be made, e.g., when it is clear that a report has already been made or the prosecutor is otherwise aware of the matter.

Furthermore, if a criminal case on tax fraud is related to an issue regarding taxes or similar fees that is pending before an administrative court, the criminal proceeding must be adjourned pending the outcome of the matter before the administrative court, provided that the judgement of the administrative matter is decisive for the criminal proceeding (Tax Offenses Act, Section 15).

The Swedish Criminal Code sets forth different statutes of limitations depending on the penalties that may be imposed following an offense. As such, the statute of limitation varies from two to twenty-five years depending on the seriousness of the offense committed. Despite this, the Tax Offenses Act specifies that the statute of limitation period applicable to tax offenses is five years at minimum (10 years at minimum for serious tax offenses) (Tax Offenses Act, Section 14). This is because the initiation of criminal proceedings are generally preceded by (more or less) extensive investigations by the STA. Furthermore, the prosecutor may notify the individual of the allegations against them in writing during the pre-trial investigations, tolling the statute of limitations (Tax Offenses Act, Section 14, Paragraph 2).

Since tolling the statute of limitations requires notifying the individual in writing, an individual who is difficult to reach (due to e.g., residing in a foreign country or having an unknown address), there must be a way to discourage abuse of the statute of limitations. If the prosecutor has attempted to reach an individual, the prosecutor may apply to the court for an extension of the statute of limitations (Tax Offenses Act, Section 14 a). The individual and their defence attorney must be given an opportunity to give their opinion of the application for extension (Holmquist, Skatt och Skattebrott, 3rd ed., p. 139). The defendant may appeal the court's decision if it's to the individual’s disadvantage.

Within the time limit, the prosecution may adjust the amounts specified as having been withheld/avoided/etc., as well as cite both aggravating and mitigating circumstances (NJA 1989 s. 469). If the charges are adjusted so that a serious tax offense becomes a "normal" tax offense, the time limit is shortened from ten years to five (Holmquist, Skatt och Skattebrott, 3rd ed., p. 139).

a. Tax offenses

The statute of limitation period starts on the day the crime is committed. An assessment on a case-by-case basis is required (Almgren & Leidhammar, Skattetillägg och skattebrott, 3rd ed., pp. 221-222).

For example, intentionally providing incorrect information to a government authority that results in a risk for an incorrect amount of tax being levied, credited or refunded entails a criminal offense. The statute of limitation period would therefore start on the day on which the incorrect information that leads to said risk is provided to the STA/other authority (id.).

For the tax offense "obstruction of tax audit", there is a special rule. If the taxpayer has been subjected to an audit by the STA within five years of the day the obstruction happened, the statute of limitation period starts to run the day that the STA makes the decision to audit the taxpayer (Tax Offenses Act, Section 14, second sentence). This means that, in theory, the statute of limitations can run for more than 10 years.

b. Tax penalties

When tax penalties are levied by the courts (see answer to Question 3), it's considered reasonable that tax penalties have the same statute of limitation period as the tax offense in question (Prop. 2014/15:131 s. 160).

Penalties like post-taxation must be decided upon within six years of the end of the calendar year where the tax year has concluded (Tax Procedure Act, Chapter 66, Section 27). Thus, the statute of limitation period starts to run when the aforementioned calendar year ends.

Punishments for individuals range from fines to up to six years imprisonment (Cf. Tax Offenses Act, Sections 3-4). A conviction for the offense of tax fraud may in some cases also result in the court, following a request by the prosecutor, imposing a disqualification from engaging in further business activities for a certain period of time.

Companies can in some cases be imposed a corporate fine based on the crime that has been committed by an individual (Swedish Criminal Code, Chapter 36, Section 7. Sw: Brottsbalken). This requires that the crime committed has a prescribed penalty of at least a fine and that it was committed while conducting (i) business operations, (ii) public operations equivalent to business operations, or (iii) other operations that a business conducts, if the crime was intended to result in an economic advantage for the company. It further requires that the company has not taken reasonable measures to prevent the crime, or that the crime was committed by (i) an individual of the company's management or (ii) an individual that otherwise has a particular responsibility for supervision or control in the business.

In addition to the abovementioned penalties, the STA may file for bankruptcy of the company in the event of default of taxes due. A request is usually lodged for the following purposes:

• if bankruptcy would prevent further debt;
• if it is likely that the government will receive dividends as a result of the bankruptcy, despite previous creditor measures not having led to payment;
• if bankruptcy would enable a better investigation regarding prior or ongoing economic crime, provided there is reason to assume that such is occurring or has occurred; or
• to prevent distortion of competition and non-serious businesses.

The criminal liability for a company will not be affected by having a compliance or risk mitigation program. However, a compliance or risk mitigation program would likely reduce the risk of committing a tax fraud offense. But the criminal liability as such will not be affected.

Yes, taxpayers may on their own initiative request a review of their previous tax returns (STA Guidance). The information provided in the voluntary disclosure must be at such detailed level that the STA should be able to make a correct decision based on the information provided (id.).

If the voluntary disclosure is made after the taxpayer has reason to believe that the STA has detected or will detect the incorrect information they have provided in their income tax return, they could be subjected to tax penalties or charges of tax evasion (Cf. Tax Offenses Act, Section 12 and Tax Procedures Act, Chapter 49, Section 10).

The voluntary disclosure may relate to incorrect information concerning the income tax returns for the previous six income years (STA Guidance). There will be a separate STA decision for each tax year (id.).

As mentioned in our answers to Question 5, individuals are required to take actions which result in the tax being chargeable on their own initiative. If the individual doesn't take the necessary actions on their own initiative, they cannot avoid liability.

If an individual has had tax penalties levied against it, this prevents a prosecution for tax crimes and vice versa in accordance with the principle of ne bis in idem (one punishment per crime/infraction).

Furthermore, many of the statutes contain provisions stating that for minor infractions there will be no prosecution. However, there is no threshold amount to determine this.

To prevent the STA from deciding on tax penalties in situations where the same circumstances already provide the foundation for criminal proceedings for a tax offense, there are a number of rules "freezing" the ability of the STA to decide on tax penalties.

The freeze is temporary and begins to apply when the STA has made a criminal report or when a preliminary investigation has been initiated for another reason (such as a report from a bankruptcy trustee or by the prosecutor initiating the preliminary investigation on his own initiative) (Tax Procedure Act, Chapter 49, Sections 10 a-b). The freeze applies pending a decision by the prosecutor. The prosecutor's decision determines whether the freeze becomes final or is lifted completely.

When a freeze is lifted, the normal statute of limitation period for the STA to decide on tax penalties may have run out. Therefore, there are special rules in the Tax Procedures Act (Sw: Skatteförfarandelagen (2011:1244)) allowing the statute of limitations period to be extended (Tax Procedures Act, Chapter 52, Section 8 a).

However, as stated above, if an individual has been sentenced due to being found guilty of tax crimes it can't also be subject to tax penalties.

Furthermore, as mentioned in the answer to Question 8, tax penalties levied by courts are considered to have the same statute of limitations as the corresponding crime.

The tax authorities can assess and collect underpaid taxes even if the case becomes criminal. If the case becomes criminal however, the tax authorities cannot impose a tax penalty according to a ruling from the Supreme Court, NJA 2013 s. 502. A criminal charge for tax offense in combination with a tax penalty would contravene the legal principal of non bis in idem. The principle has been recognized as fundamental in EU-law and states a prohibition of double penalties.

Assess and collect underpaid taxes should not be regarded as a tax penalty. Therefore, the tax authorities should be able to assess and collect underpaid taxes even if the case becomes criminal.

In Sweden, it is not possible to reach a criminal settlement with the public prosecutor or the judge. It is also not possible to reach a tax settlement with the STA.

The representatives of a business has entrepreneurial liability, i.e., criminal liability for offenses committed in the course of his or her business. This liability arises from the fact that, under certain conditions, the entrepreneur has a responsibility to ensure that no offenses are committed in their business. In a limited liability company, the guarantor liability is primarily borne by the board of directors or the CEO, if there is one.

However, the liability of a legal person's formal representatives also applies to so-called de facto representatives. This refers to a person who, because of his or her position of power, in fact exercises a controlling influence in the company. Criminal liability requires that the intent required for the offense can be attributed to the representative.

Only individuals may be prosecuted for tax fraud offenses. However companies can be imposed a corporate fine, at the request of the prosecutor, due to the lack of measures to prevent such offenses or if the individual/individuals responsible for the offense have a certain leading position in the company (see answer under Question 13).

A company does not get prosecuted when a corporate fine is imposed. The corporate fine is merely a sanction resulting from an already prosecuted crime committed by an individual. The fine is therefore to be seen as a legal effect of the crime committed by an individual person.

The Tax Offenses Act applies generally to Swedish taxes and other charges which are not classified as taxes (if specifically provided for) (Tax Offenses Act, Section 1). There is no such limitation in scope regarding the nationality of individuals who may be prosecuted. A tax offense could constitute a Swedish tax offense if the act involved Swedish tax and the information involved the STA.

Foreign individuals are subject to same requirements as Swedish nationals when assessing negligence according to the Tax Offenses Act. For instance, in NJA 1976 s. 507, a foreign citizen who had lived in Sweden for one year was deemed to have provided incorrect statements in an income tax return due to gross negligence. The Supreme Court of Sweden recognized that foreign citizens understandably face some difficulties in their first income tax return. Despite this, the Court reasoned that they must have understood that the tax return would be the basis for determining their tax liability. They must also have understood that they were responsible for the content of the tax return.

According to the Swedish Criminal Code, Chapter 36, Section 7, if a crime subject to harsher punishments than fines is committed within the exercise of a company's business activities, the prosecutor may demand that the court imposes a corporate fine on that company.

Furthermore, the company must have failed to take reasonable steps to prevent the crime, or the crime must have been committed by a director (or a person who otherwise had specific responsibility for the supervision or control of the business).

Failing to take reasonable steps to prevent a crime includes having inadequate procedures and controls.

Even if the above conditions are met, a corporate fine shall not be imposed if the offense was directed against the company itself.

According to the Swedish National Council for Crime Prevention, convictions for tax offenses have generally decreased in the last five years. However, from 2020 and onwards there seems to be a trend change in increased convictions. Convictions for tax accounting offenses have slightly increased in the last five years.

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