Possible cases of tax evasion
Possible cases of tax evasion
The director of the company that employs me uses the company's money for private purposes, for example to go shopping at the weekend or to pay for his personal car, even though he deducts a flat rate for transport on his tax return. He is also recovering the company's old IT equipment. Apart from taking action for the damage caused to the company, is there any way of taking action on the tax front?
X, Geneva
A self-employed person may deduct all expenses incurred in connection with his or her professional activity that are justified by commercial or professional usage, at both cantonal and federal level.
An employee can deduct travel and meal expenses, as well as other expenses incurred in the course of his or her work. In practice, these are less extensive than the expenses that can be deducted for a self-employed person. In Geneva, there is a flat-rate deduction of 3% for the above-mentioned expenses, with a minimum of CHF 600 and a maximum of CHF 1,700. The taxpayer may, however, produce documentary evidence of higher expenses.
Legal entities are taxed on their profits. They are therefore able, in the same way as a self-employed person, to deduct all the costs necessary for their business. Salaries paid to employees, including the director's salary, will be deducted from the company's profits. Employees, on the other hand, will be taxed on this salary on an individual basis.
It is important to note that benefits in kind that an employee receives from his employer, such as a company car, accommodation at a preferential rent or meals paid for by the company, are considered to be benefits that can be valued in money and are taxed as income for the employee.
If your director does not declare to the tax authorities the appreciable cash benefits he receives from the company, this behaviour could constitute tax evasion within the meaning of Articles 175 LIFD (Federal Law on Direct Federal Tax) and 69 LPFisc/GE (Geneva Tax Procedure Law).
However, according to article 10A of the Geneva Administrative Procedure Act, any person may bring to the attention of the authorities facts likely to lead to the opening of an administrative procedure. However, the authorities must not act on anonymous reports.
