The voluntary disclosure still allows tax evaders to return to tax honesty. For a voluntary disclosure to be exempt from punishment, various conditions must be met.
German tax law recognizes the peculiarity of the penalty-free voluntary disclosure. With this option, lawmakers have paved the way for tax evaders to return to tax honesty. For the voluntary disclosure to have an exonerative effect, various conditions must be fulfilled, explains the commercial law firm MTR Legal Rechtsanwälte, which has a focus on tax law and also advises on the creation of an effective voluntary disclosure.
A penalty-free voluntary disclosure can only be filed if the tax evasion has not yet been discovered or if the taxpayer did not yet have to anticipate the discovery of his act. Additionally, the voluntary disclosure must be complete, meaning it must include all tax-relevant data from the past ten years.
In the voluntary disclosure, all tax-relevant information required by law must be retrieved, corrected, or supplemented. Furthermore, there must not be a so-called blocking reason for a voluntary disclosure. A blocking reason exists, among other things, if the tax authorities have already discovered the act or if the tax evader must expect a discovery. Whether this is the case when the tax evader’s name could appear on a tax CD, tax audits are ordered, or tax investigations are carried out with a business partner, is legally disputed and must be examined on a case-by-case basis. Therefore, it is better to file a voluntary disclosure as early as possible, even if there is not yet an acute danger that the tax evasion could be discovered.
The requirements for an effective voluntary disclosure are high, and even small mistakes can lead to the invalidity of the voluntary disclosure. Therefore, experienced lawyers in tax law and tax criminal law should be involved in a voluntary disclosure. They know which information is required for the voluntary disclosure to have an exonerative effect and can assist discreetly in its preparation.
The voluntary disclosure is still the best way to protect oneself from a conviction for tax evasion. In the event of a conviction, fines or even imprisonment may be imposed.
Lawyers experienced in tax law at MTR Legal Rechtsanwälte advise on voluntary disclosure.
