Although criminal legislation and the laying down of penalties are matters for which member states are responsible, EU law1 sets certain limits in cases where national legislation may have an impact on the neutrality of internal taxation with regard to intra-community trade and the proper functioning of the common system of VAT. A system of penalties would jeopardise the freedoms provided for by the EU Treaty if a penalty were so disproportionate to the gravity of the offence that it became an obstacle to the freedom guaranteed by EU law2.
The acts and omissions which give rise to criminal offences and the relevant provisions of the VAT legislation are described in V5.303.
The manner in which criminal proceedings are brought before the courts is outside the scope of this work. However, the general law is modified in relation to offences arising under, or applied to VAT, and the modifying provisions are described in V5.304–308.
Certain penalties in relation to offences unique to VAT are prescribed by reference to the “statutory maximum” or a level