Criminal tax law: discretion, speed, procedural certainty

Voluntary disclosure

Section 371 of the German Fiscal Code (AO) makes it possible to obtain exemption from punishment through a complete correction. The requirements are strict and are interpreted narrowly by the courts.

Completeness requirement. All tax offences relating to one type of tax that are not yet time-barred must be corrected, covering at least the last ten calendar years (Section 371 (1) AO). A partial disclosure does not exempt from punishment and at the same time gives the authorities a starting point for investigation.

Back payment. Taxes and interest on evaded taxes must be paid within the deadline set; without timely payment, there is no exemption from punishment. Financing must be secured before the disclosure is filed.

Surcharge for higher amounts. If the evaded amount exceeds EUR 25,000 per offence, there is no automatic exemption from punishment. Prosecution is only waived if a staggered surcharge is also paid: 10 per cent of the evaded tax up to EUR 100,000, 15 per cent up to EUR 1,000,000 and 20 per cent above that (Section 398a AO).

Grounds for exclusion

Whether a voluntary disclosure can exempt from punishment depends in particular on its completeness, the payment requirements and possible grounds for exclusion. These include, for example, notification of an audit order or of the opening of criminal or administrative penalty proceedings. The blocking effect of an audit order is limited to its subject matter and period. An offence that has already been discovered can also block a disclosure if the offender knew this or, on a reasonable assessment of the facts, had to expect it. Special rules apply to advance VAT returns and wage tax returns. We examine the requirements in each individual case. Time is therefore a decisive factor: get in touch before you submit any documents to the tax office.

Our approach

In the initial consultation, we clarify grounds for exclusion and urgency — usually by phone, within half an hour. We then establish the full facts for the required period and calculate the amounts reliably; a disclosure based on estimates is possible, but should err on the high side to be safe. We then prepare and file the corrected returns and see the proceedings through to completion, including correspondence with the tax authorities.

Criminal tax proceedings

Once proceedings have been opened, the focus shifts to the defence during the investigation: dealing with searches and seizures, reaching an understanding on the facts, coordinating with the tax investigation office. We are responsible for the tax aspects of the defence and work closely with specialised criminal defence lawyers — a division of tasks that has proven effective, because establishing the tax facts and conducting a criminal defence require different expertise.

In the event of a search: stay calm, make no statements on the matter, call us immediately. There is no obligation to make a statement.

Frequently asked questions

Until when is a voluntary disclosure possible?

Whether a voluntary disclosure can exempt from punishment depends in particular on its completeness, the payment requirements and possible grounds for exclusion. These include, for example, notification of an audit order or of the opening of criminal or administrative penalty proceedings. The blocking effect of an audit order is limited to its subject matter and period. An offence that has already been discovered can also block a disclosure if the offender knew this or, on a reasonable assessment of the facts, had to expect it. Special rules apply to advance VAT returns and wage tax returns. We examine the requirements in each individual case.

How many years must be corrected?

All offences relating to one type of tax that are not yet time-barred under criminal law, covering at least the last ten calendar years. The period for tax back payments may differ.

What is the total cost of a voluntary disclosure?

In addition to the advisory fee, the evaded taxes must be repaid, plus interest on evaded taxes and — where the evaded amount exceeds EUR 25,000 per offence — a surcharge of 10 to 20 per cent under Section 398a AO. The total cost should be calculated and financing secured before the disclosure is filed.

Will my employer or bank find out about the voluntary disclosure?

We are bound by a statutory duty of confidentiality; we do not inform third parties. Whether and when authorities inform other bodies depends on the individual case and is discussed openly in the initial consultation.

Can I write a voluntary disclosure myself?

Technically yes, but in practice we advise against it. An incomplete disclosure loses its exempting effect yet still reveals the facts. The most common errors: too short a correction period, overlooked types of tax, wording that amounts to a partial disclosure.