In criminal tax law, a distinction is made between a reduction in the sentence and a mitigation of the sentence: a reduction in the sentence occurs within the statutory sentencing range, whereas a mitigation of the sentence allows the sentence to fall below this range, provided that the grounds for mitigation specified in Article 48 of the Swiss Criminal Code (StGB) are present. In practice, however, there is often terminological ambiguity, as mitigation of punishment is mistakenly used as a synonym for reduction of punishment, and it remains unclear which circumstance falls under which article—a situation complicated by the prohibition against double jeopardy.
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In criminal tax law, a distinction is made between a reduction in the sentence and a mitigation of the sentence: a reduction in the sentence occurs within the statutory sentencing range, whereas a mitigation of the sentence allows the sentence to fall below this range, provided that the grounds for mitigation specified in Article 48 of the Swiss Criminal Code (StGB) are present. In practice, however, there is often terminological ambiguity, as mitigation of punishment is mistakenly used as a synonym for reduction of punishment, and it remains unclear which circumstance falls under which article—a situation complicated by the prohibition against double jeopardy. Although Art. 48 StGB is applicable by analogy in tax law, many of the grounds listed there are difficult to apply to tax matters. Some cantons, such as Lucerne, maintain their own lists of grounds for mitigation of punishment without distinguishing between reduction and mitigation—which is legally problematic.
Individual grounds for mitigation are weighted differently and are applied only sporadically in practice. Acting under severe distress pursuant to Art. 48(a)(2) StGB is rarely taken into account, as financial difficulties are usually assessed within the context of a debt relief proceeding. Similarly, acting at the instigation of others under Art. 48(a)(4) StGB plays hardly any role in practice; here, dependence on other persons is generally taken into account only when determining the sentence. Repentance and restitution within the meaning of Art. 48(d) StGB require that the person concerned act voluntarily, which is rarely the case, particularly in back-tax proceedings. Nevertheless, a voluntary disclosure is frequently recognized even without genuine repentance. The passage of time and good conduct in the interim may, pursuant to Art. 48(e) StGB, lead to a reduction in the penalty if the need for punishment appears diminished due to the length of the proceedings. Finally, the treatment of particularly minor cases is regulated differently by canton: While in Lucerne fines are sometimes waived in cases of minor culpability, the Canton of Basel-Landschaft applies Articles 52 through 54 of the Swiss Criminal Code (StGB) analogously.
In the Canton of Zurich, taxes already paid abroad (in cases where the center of life has been incorrectly determined) may be deducted from a tax evasion fine imposed in a back-tax proceeding. In our experience, however, this is not a consistent practice of the cantonal tax administration, but is merely applied in isolated cases to avoid hardship. This requires the signing of a waiver: “I hereby expressly and irrevocably confirm (waiver) that I will not initiate a mutual agreement procedure between Switzerland and […] for the tax period […] or otherwise reclaim the […] for the tax period […] by any other means, on the condition that these taxes already paid are fully deducted from any fine in the fine proceedings.”
“But there is another inappropriate analogy. You say: A helmsman is equally at fault whether he capsizes a ship laden with chaff or a ship laden with gold; likewise, the one who unlawfully strikes his father and his slave is equally at fault. But do you not see that it is none of the helmsman’s business what kind of cargo he has loaded? – Therefore, whether the ship is loaded with chaff or with gold has no bearing on good or bad steering; but the difference between a relative
