Voluntary disclosure is an opportunity to return to tax legality without penalty. However, this is only successful if the requirements for the voluntary disclosure are met.
Tax evasion can be severely sanctioned, and tax offenders face heavy fines or even imprisonment. With the voluntary disclosure that grants immunity, tax offenders still have the opportunity to return to tax honesty. However, the voluntary disclosure can only work without penalty if it meets the high requirements set by the legislator. It must be complete and made in a timely manner, i.e., before the authorities discover the offense, says lawyer Michael Rainer, MTR Legal.
Of course, the information in a voluntary disclosure must be truthful to allow for immunity. A man was not precise in this regard and therefore failed with his voluntary disclosure at the Nuremberg-Fürth Regional Court (judgment of May 4, 2022 – 12 Ns 508 Js 2272/20).
At the time, the 80-year-old man had been convicted of tax evasion by the Nuremberg District Court in October 2021 because he had concealed income from a sale transaction amounting to 687,500 euros in his 2016 income tax return. He appealed the judgment, arguing that a voluntary disclosure granting immunity existed. He claimed to have reported a consultancy fee of exactly 687,500 euros to the competent Nuremberg Finance Court in March 2019, which he had actually never received.
The Nuremberg-Fürth Regional Court in the appeal proceedings did not accept this argument but confirmed the conviction for tax evasion. The court clarified that there was no voluntary disclosure granting immunity under § 371 AO. Aside from the fact that a finance court is not a tax authority and therefore already the wrong recipient for a voluntary disclosure, the defendant did not duly inform about the 2016 capital gains. Instead, he pretended non-existent income, which moreover would only have been taxable in 2017, according to the Nuremberg-Fürth Regional Court.
Errors in a voluntary disclosure do not have to be as obvious as in this case. Even small errors can already lead to the ineffectiveness of the voluntary disclosure. Therefore, experienced lawyers in tax law should be consulted.
