The Current Legal Situation Regarding Tax Evasion
Information on Criminal Tax Law
In light of the recent confessions by many prominent figures, including Alice Schwarzer and Uli Hoeneß, and the purchase of additional tax CDs, it is important to take a closer look at the topics of criminal tax law and tax evasion. How should you proceed in such a case? What is the correct legal process? Our attorneys and tax advisors in Düsseldorf and Oberhausen will provide you with the answers to your questions.
Definition: Tax Evasion
In Germany, tax evasion is a criminal tax offense punishable under Section 370 of the German Fiscal Code (AO). A distinction is made here between objective and subjective elements of the offense, all of which must be present. While the objective elements are fulfilled by the incorrect or incomplete reporting of tax-relevant facts to the tax office or customs office, tax evasion requires, subjectively, that the person involved provided the false information intentionally. However, even an attempt is already punishable (Section 370(2) AO).
In summary, tax evasion occurs when intentionally incorrect or incomplete information is provided to the tax authorities, thereby reducing the tax liability—that is, resulting in a tax advantage.
Penalties for Tax Evasion
As a rule, working with a tax advisor can prevent a case of tax evasion if the client provides all necessary information. Taxes and finances are a matter of trust; this is a given at our firm. Because in the event of a tax audit, the person involved faces not only financial penalties:
| Amount of tax evasion in euros | Penalty | Imprisonment |
| up to 1,000 | Case dismissed with conditions | – |
| up to 50,000 | Fine | – |
| up to 100,000 | Imprisonment or fine | may be suspended |
| up to 1,000,000 | Imprisonment and possibly a fine | may be suspended |
| more than 1,000,000 | Imprisonment and possibly a fine | Probation not possible |
The penalty ranges listed above are for guidance only. The court decides on a case-by-case basis which specific penalty within the range will be imposed.
Criminal Tax Law: Voluntary Disclosure Leads to Immunity from Prosecution
The frequently discussed voluntary disclosure in cases of completed tax evasion is also relevant. If the offender voluntarily discloses the offense before an investigation begins, the unpaid taxes must be paid retroactively (Section 371(3) AO), but immunity from prosecution applies in this case. Therefore, it is advisable to seek early consultation with our tax advisors and experts in criminal tax law in order to be able to react promptly in the event of tax evasion.
Individual Tax Law Consultation
Our firm provides clients with the following advisory services regarding tax evasion and criminal tax law:
- Distinctions between tax evasion and reckless tax underpayment
- Avoiding criminal tax offenses
- Statute of limitations for tax offenses
- Potential penalties
- Options for discontinuing proceedings without punishment
- Exemption from punishment through voluntary disclosure
- Rights and obligations in criminal proceedings
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