Does Tax Evasion Generate Criminal Proceeds? A Comparative Analysis of Latvian and Estonian Case Law

Tax evasion is a crime that involves an illegal reduction of tax liabilities by concealment of income, falsification of records, or other unlawful means of decreasing financial obligations. The study examines whether tax evasion can generate criminal proceeds. The aim of the study is to determine whether tax savings fall within the scope of criminal proceeds and to assess the effectiveness of legal regulation of tax crime as predicate offence for money laundering. The research compares Latvian and Estonian legislation and case law, taking into account the European Union (EU) and international legal framework. The findings reveal divergent legal approaches on this issue. Latvian courts recognise tax savings as criminal proceeds, whereas Estonian courts require additional evidence that the unpaid taxes are irrecoverable by the state. The study highlights differences among EU member states in treating tax evasion as a predicate offence, underlining the need for greater legal harmonisation at the European level.