27. Dec 19

NRW buys tax CD – Voluntary disclosure of tax evasion possible

The German state of North Rhine-Westphalia (NRW) once again purchased a tax CD at the end of November. The storage medium in question is supposed to contain information on tax evasion. It is still possible to submit a voluntary declaration for tax evasion.

Following an extended period of little activity in terms of the purchase of controversial tax information and revelations such as the Panama and Paradise Papers, the German state of North Rhine-Westphalia has once again purchased a tax CD. The data from Belize in Central America is supposed to include controversial information on possible tax offenses. According to media reports, an initial assessment has already been conducted and the data made available to other federal states.

There is nothing inherently wrong with foreign participating interests, financial investments, and accounts. But if these generate income that is subject to tax in Germany, then they must be declared to the authorities. Anyone concealing taxable income from the tax office runs the risk of not only subsequent tax payments, but also fines and potentially even imprisonment. We at the commercial law firm MTR Rechtsanwälte note, however, that it is still possible in many cases to submit a voluntary declaration leading to immunity from tax evasion charges.

That being said, the voluntary declaration can only lead to immunity if it is complete, includes all tax-relevant information from recent years, and is submitted on time, i.e., it needs to be submitted before the tax evasion is discovered by the tax authorities. While it is debatable whether simply purchasing a tax CD constitutes discovery of a tax offense, affected tax offenders ought to take action immediately, because efforts to evaluate the data have already begun. Even if the offense has already been discovered, a voluntary declaration can still have a mitigating effect similar to a confession.

Due to the complexity of the requirements set forth by the legislature in order for a voluntary declaration to lead to immunity, it should not be prepared without the assistance of expert lawyers with experience in the field of tax law, since even minor errors can result in an ineffective voluntary declaration.

Lawyers with experience in the fields of tax law and criminal tax law know what information needs to be included in the voluntary declaration for it to be capable of leading to immunity. The close relationships based on discretion and trust that our team builds with clients mean they can prepare an effective voluntary declaration for tax evasion.

For more informations:

https://www.mtrlegal.com/en/legal-advice/tax-law/voluntary-disclosure.html

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