Voluntary disclosure in cases of tax evasion is a complex issue. Even minor errors can result in an ineffective voluntary declaration, and then there is the threat of a conviction for tax evasion.
GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London - www.grprainer.com/en conclude: Despite the more stringent requirements that came into force at the beginning of the year, voluntary disclosure can still lead to a return to tax compliance and afford protection from further criminal proceedings and a conviction for tax evasion.
That being said, voluntary disclosure is a complex issue with many pitfalls. Even small mistakes can result in an ineffective voluntary declaration. Typical sources of errors include the voluntary declaration being sent to the wrong address. The recipient of the voluntary declaration is not the police or the public prosecutor’s office but the competent tax office. A voluntary declaration must, of course, be complete, i.e. it must contain all tax-relevant information from the past ten years. It is easy for a layman to make mistakes here if he does not take account of all forms of tax. If several people are involved in the evasion of tax then they should all submit a voluntary declaration as well. If only one person submits a voluntary declaration, the other persons concerned are no longer able to file an effective voluntary declaration. This can occur, for instance, in cases involving communities of heirs that discover untaxed illicit earnings in the estate.
In order to avoid these traps, voluntary declarations should not be prepared alone or with the help of standard templates. It is safer to engage lawyers and tax advisors who are experienced in the field of tax law. They can assess each case individually and know what information has to be included in the voluntary declaration for it to be able to take effect.
Voluntary disclosure will then only enable tax evaders to go completely unpunished if the amount of evaded taxes does not exceed 25,000 euros. In cases involving higher amounts, penalties of between ten and twenty per cent will fall due. It is only after the evaded taxes have been settled and the interest due, as well as any penalties where appropriate, paid that the matter is resolved and there is no longer the threat of further punishment for tax evasion.