Voluntary disclosure – Hesse purchases Pandora Papers

News  >  Voluntary disclosure – Hesse purchases Pandora Papers

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The German state of Hesse has begun delving into the so-called “Pandora Papers” with a view to uncovering evidence of tax-related offenses. Anyone considering submitting a voluntary declaration for tax evasion ought to take action now.

The name “Pandora Papers” refers to the millions of financial documents that were leaked in 2021 containing information about tax havens and, in particular, offshore investments. The more than 3.8 terabytes of data harbor a potential treasure trove of evidence pointing to tax evasion, tax fraud, as well as other criminal offenses. The Minister of Finance for Hesse, Michael Boddenberg, announced at the end of June that hisstate had purchased this data and would be assuming responsibility for evaluating it within Germany and for the benefit of foreign authorities.

Not all of the financial dealings laid bare in the Pandora Papers are expected to amount to indictable offenses. That being said, if income that is liable for taxation has been concealed from the German tax authorities, those responsible may be guilty of tax evasion. The individuals in question can still submit a voluntary declaration for tax evasion in the hopes of obtaining an exemption from punishment, notes commercial law firm MTR Legal Rechtsanwälte.

The Pandora Papers came into the possession of the International Consortium of Investigative Journalists (ICIJ) back in 2021. Now, having recently purchased the data, the state of Hesse has begun the process of evaluating its content.

This is not the first time the state has been responsible for analyzing such large quantities of data, having also taken the lead in examining the Panama Papers on behalf of the tax authorities in Germany. And the experts have their work cut out for them again, with the Pandora Papers spanning at least 10.4 million documents.

This means it will be some time before the evaluation process is complete. This does not mean, however, that tax evaders can afford to take their time in submitting a voluntary declaration, as it can only lead to immunity if it is submitted on time. If the tax evasion has already been discovered by the authorities, it is too late. Yet even in these instances it is possible for the declaration to have a mitigating effect, though timely submission is just one precondition for effectiveness.

The voluntary declaration must also be comprehensive if it is to be capable of leading to immunity. It needs to be informative to the point where the competent tax authorities are in a position to comprehend the circumstances of the case without having to conduct further investigations, thus enabling them to demand subsequent payment of any evaded taxes and removing the threat of punishment for tax evasion.

Prospective clients can have confidence in MTR Legal Rechtsanwälte’s ability to assist in preparing a legally watertight voluntary declaration.

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