The operators of a Laufhaus and sauna club in Flachgau were confronted on Wednesday in a trial at the Salzburg Regional Court with charges of tax evasion amounting to 1.1 million euros. The three defendants did not confess. In the end, there wasn’t much left of the indictment – a small number of guilty verdicts (of the allegations) and an entire acquittal were made.
They are said to have damaged the financials by shortened sales tax returns by 946,000 euros in the period 2009 to 2017 and by shortened sales tax returns by 199,000 euros in 2018 and 2019.
The accused are the managing director, a woman who was temporarily active in the management at the time and the authorized signatory of the GmbH – he is the woman’s partner. The company itself is also accused under the Association Responsibility Act.
According to the indictment, the company was taxable for the sales of the women working in this establishment and should therefore have paid the sales tax to the finance department. These women work within a company structure and are also bound by opening times. Therefore, their services can be attributed to the company, was the argument. Drinks are also consumed and contacts are made possible. All of this should be understood as a uniform service.
“We have an entrepreneur-entrepreneur relationship here”
Lawyer Klaus Plätzer, the defendant’s attorney, saw things differently. “This is a legal issue,” he emphasized. The ladies are self-employed and are therefore not bound by any company instructions. By 2014 the situation was clear, there was a flat tax of 300 euros per lady. Then the company asked the tax office how to deal with the taxation of prostitutes in the future. After a tour of the company, an employee of the financial administration stated that the women should be treated as self-employed, the lawyer said.
“We have an entrepreneur-entrepreneur relationship here,” explained defense attorney Plätzer, who has lodged a complaint with the Federal Finance Court. The sex workers would also pay income tax. A brothel is actually a marketplace, a platform on which the ladies can legally exercise their servitude. As far as the performance of women is concerned, there is a separate contract between her and the customer without involving the operator: “The company doesn’t even know what the lady is getting.”
“That is legally not tenable”
The tax authorities would be obliged to impose sales tax on women and not to attribute this to the company, said the lawyer. “That is not legally tenable.” He will request an acquittal for the three accused. “Both the objective and the subjective facts are not fulfilled.”
The chairman of the senate of lay judges asked the managing director how the company’s balance sheets are currently. “Business has been very bad for two years,” said the first defendant, referring to the corona pandemic. The establishment is currently closed, he does not expect an opening in the foreseeable future.
The managing director and the accused woman are judicially harmless. The authorized signatory has already appeared in court several times. A compensation for the damage has not yet taken place due to the pending tax proceedings at the Federal Finance Court.
Three guilty verdicts only in part and one acquittal in full
The senate of lay judges, chaired by Judge Thomas Meingast, found the managing director, the woman, who also worked as managing director, and the company (according to the Association Responsibility Act) ultimately guilty of “only” sales tax evasion for a period of two years (2013 and 2014). Verdict: each 40,000 euros fine, half of which is conditional. Justification of the Senate: An intentional act beyond the specified period cannot be proven in their cases.
The authorized officer, who was also accused, was immediately acquitted in full. In his case, according to the judgment, there was “no liability under tax law”. All judgments are already final, as announced by Peter Egger, spokesman for the Salzburg regional court.
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