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Criminal tax law

Criminal tax law has gained considerable importance in recent years. It is becoming more and more difficult for companies, as well as for individual tax debtors, to avoid criminal tax risks and to behave correctly in terms of tax law, given the growing complexity of criminal tax law.

This development was triggered by the procurement of various “tax CDs” by German tax authorities. In this case, the authorities paid substantial amounts of money to foreign criminals to secure illegally obtained data on German taxpayers from foreign credit institutions. This practice is in accordance with the law according to the applicable case law.

On the basis of this purchased data and its comparison with the respective tax returns of the citizens concerned, a large number of criminal proceedings were initiated on suspicion of tax evasion. In some cases, the proceedings have been clearly and deliberately conducted in a high-profile manner by the authorities. The politically initiated discussion on this subject and a number of rulings by the Federal Court of Justice have led in several stages to a tightening of criminal tax law, particularly with regard to an extension of the statute of limitations for tax evasion offences and aggravation of the possibility of self-disclosure that exempts the offender from punishment.

A proper defence against the charge of tax evasion is not possible without a close look at the substantive tax law. This is because the prerequisite for any evasion is that the person concerned actually did owe the allegedly evaded tax. However, substantive tax law is confusing and constantly changing. This means that tax obligations are also subject to constant change. For this reason, the inclusion of an experienced tax advisor in the defence team is essential in complex tax matters. The lawyers at ECKSTEIN & KOLLEGEN can draw on their extensive network for this purpose and are thus able to develop the optimal strategy under criminal law for each individual case.

Self-disclosure still an option

In recent years, the legislator has taken various steps to reduce the attractiveness of self-disclosure with exemption from punishment. However, the possibility of being able to return to tax honesty has not been abolished. Self-disclosure should therefore still be seriously considered in appropriate cases. In view of the dramatic flood of events following the purchase of bank data containing the account information of German citizens, as well as ever closer international cooperation between countries, the risk of detection with regard to foreign investment income must be considered significant.

When a specific tax offence is discovered, the possibility of a voluntary declaration is blocked, which is why reacting quickly when an official investigation is launched may sometimes be necessary. However, due to the now difficult-to-understand requirements regarding the necessary content of a voluntary disclosure, such a step should not be taken without criminal law counsel – especially in urgent cases – as a mistake may render the desired impunity from prosecution null and void.

One area of particular expertise for ECKSTEIN & KOLLEGEN in this field of law are so-called “Cum/Ex” cases. Numerous criminal tax proceedings are currently pending throughout Germany, not only at the Cologne Public Prosecutor’s Office, which must be defended with skill and competence but also with expertise in criminal tax law due to the high-level of public attention.