Fraud Prevention Act 2024

Fictitious companies issue fictitious or cover invoices to other companies and so-called intermediary companies initially pay the invoices. The money is then withdrawn in cash and ultimately paid to the company actually providing the service (so-called "kick-back payments"). This allows black money to be laundered and services to be abused. The fictious invoices are also wrongly used to claim input tax. Companies thus reclaim taxes from the state for services that were not provided in this form. Sectors such as construction and ancillary construction trades, cleaning, security, events, special services and labour leasing are particularly often affected. This fraud phenomenon can also be observed at European level.

  
New financial offence

The Fraud Prevention Act is intended to introduce a new financial offence in the Financial Crimes Act (FinStrG) to counteract the loophole in financial criminal law in connection with sham companies and the sham and cover invoices issued by them. Accordingly, anyone who, with the intention of falsifying a business transaction or concealing its true content, falsifies documents, produces false or incorrect documents or uses falsified, false or incorrect documents for books or records required to be kept under tax or monopoly law is liable to prosecution. A receipt is falsified if its content is altered without authorisation and at the same time the appearance is created that its current content originates from the person issuing it. The penalty is a fine of up to € 100,000.

  
Amendment of the Act to Combat Social Fraud

Furthermore, the current draft bill is intended to amend the Act to Combat Social Fraud, which came into force in 2016. In future, abuse of benefits (relating to the receipt of insurance, social or other transfer benefits) is to be recorded as a social fraud offence and thus in the social fraud database. Furthermore, the definition of a bogus company will be expanded to include anyone who falsifies, uses or produces documents or makes them available to another company in order to simulate a business transaction or conceal its true content. Caution is therefore also required for ordinary companies when dealing with dubious documents, as even the use of falsified documents issued to them can lead to negative consequences for these companies.
The parliamentary resolution and the actual enactment of the law remain to be seen.
  

Hint

An invoice is one of the requirements for claiming the input tax deduction. Particularly in "conspicuous" sectors, in addition to the invoice, correspondence, delivery notes, order letters or printouts from the Ministry of Finance list of bogus companies must be kept for documentation purposes in order to be able to prove in the event of a tax office audit that you have not concluded a contract with any bogus companies or that you had no knowledge of this.