• Voluntary Disclosure In Relation To Untaxed Income Received From Service Fees Charged To an Agency
  • July 1, 2013 | Author: Michael Rainer
  • Law Firm: GRP Rainer LLP - Munich Office
  • Reportedly, a number of university-level professors have voluntarily made disclosures in relation to untaxed income received as service fees charged to a PhD conferral mediation agency.

    GRP Rainer Lawyers Tax Advisors, Cologne, Berlin, Bonn, Bremen, Düsseldorf, Essen, Frankfurt, Hamburg, Hanover, Munich, Nuremberg, Stuttgart and London www.grprainer.com/en explain: As part of a tax audit in a doctor’s office, an account invoice document fell into the hands of the auditor in charge of the audit which indicated that agency mediation fees in the amount of 10,000 EUR had been paid; however, there was no indication as to what type of mediation such a fee was for. Since the audit examiner in charge had not received any information in regard to the fee from the respective doctor, he found out as a result of his own research that the commissions came from a company that mediated contacts between professors and students.

    In the context of the audit of the company, it was apparent that the company received the referral fees because it mediated contact between prospective doctoral students and university professors. The professors, who then took over responsibility for the doctoral thesis in exchange for payment, even received an additional payment for the successful conferral of a doctorate.

    Additional tax payments in the amount of 1 million EUR resulted from the context of these two audits. Criminal tax proceedings were launched against the owner of the company. After that, the frequency of voluntary disclosures of the university professors seemed to increase because the income received as service fee charges had often not been taxed. Many of the university professors had even arranged to provide service to a third party so as not to stand in direct connection to the company. It appears that the university professors were aware that their actions made them liable to prosecution.

    A voluntary disclosure is a complex process which, before any rash decisions, should be advised against. Whoever makes such disclosure statements can still be prosecuted and have to deal with considerable additional tax payments. In any case, an experienced attorney should be consulted.

    http://www.grprainer.com/en/Voluntary-Disclosure.html