Facts
Parties: Public Prosecutor's Office of the Canton of Zurich (appellant) against A. and B. (respondents 1 and 2).
Facts: A. and B. were shareholders of C. AG. They were accused of booking private expenses as business expenses in the tax periods 2002 to 2005, thereby deceiving the tax authorities. C. AG was subjected to an audit in 2008. The contested items were settled in the additional tax and penalty proceedings. An additional tax and penalty proceeding against A. and B. was opened in 2008 and concluded in 2009. The District Court of Zurich convicted A. and B. of multiple tax fraud and forgery. However, the Higher Court of the Canton of Zurich acquitted them of all charges.
Main issue: Admissibility of statements by tax representative G. and respondent 2 in the tax fraud proceedings.
Considerations
The statements of tax representative G. were made as a representative of respondent 2 and are attributable to him. The statements were presented to the respondents in the tax fraud proceedings, and they were able to comment on them. Their right to be heard was thus respected. The statements are not generally inadmissible, but only if the taxpayer was warned and threatened with a discretionary assessment or conviction for violation of procedural duties. This was not the case here.
The statements were not made in the context of a settlement procedure, which would have had to be treated confidentially. The cantonal tax administration fulfilled its duty to clarify, so the evidence from the additional tax and evasion proceedings is fundamentally also admissible in the tax fraud proceedings. The failure to inform about the right to refuse to testify does not…