• Tax Evasion: Tightening up of Voluntary Declarations has Cash Tills Ringing
  • December 18, 2014 | Author: Michael Rainer
  • Law Firm: GRP Rainer LLP - Cologne Office
  • The planned tightening up of voluntary declarations supposedly has cash registers ringing. Die Welt reports that this will apparently entail additional revenues of around 15 million euros a year.

    GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London - www.grprainer.com/en conclude: The Cabinet wants to decide in September on the planned tightening up of voluntary declarations in the event of tax evasion from 2015. This would result in voluntary declarations becoming not only substantially more difficult but also more expensive. Die Welt Online reports that this would bring the federal government around 15 million euros in additional revenues a year.

    The plan is to make tax evasion punishable retroactively for the past ten years instead of simply five years from 2015. Additionally, penalty surcharges are set to rise sharply. A voluntary declaration will then only lead to complete immunity if the sum of evaded taxes does not exceed 25,000 EUR. This figure is currently set at 50,000 EUR. In cases involving evaded taxes of up to 100,000 EUR, a penalty surcharge of 10 percent will be due going forward; for evaded amounts up to one million euros, a penalty surcharge of 15 percent will be imposed; and 20 percent for amounts greater than one million euros. Tax evaders should note here that both the evaded taxes and the penalty surcharge have to be paid within a very short period of time for the voluntary declaration to be effective.

    The voluntary declaration must, of course, also be submitted on time and be complete. To this end, it is currently necessary for all of the relevant tax data from the past five years to be disclosed. In a lot of cases, this can prove problematic for laymen. A voluntary declaration should therefore not be prepared alone or with the help of standard forms. The risk in this case of something going wrong and the voluntary declaration not working is high. It is always safer to turn to lawyers and tax advisors who are competent in the field of tax law. They can assess each case individually and know which documents are required for the voluntary declaration to be effective.