The German Bundestag is currently discussing the draft legislation concerning the planned tightening of the rules for voluntary disclosure in cases of tax evasion. The law is likely be passed before Christmas.
Following consultations in the Bundestag, the bill concerning the tightening of the rules for voluntary disclosure in cases of tax evasion goes to the competent committees in the Bundesrat. The law can be expected to be adopted before Christmas and then come into force on January 1, 2015.
If the law comes into force, it will become more difficult for tax evaders to return to a state of tax compliance by means of a voluntary declaration. The bill stipulates that it is only possible for tax evasion to go completely unpunished if the amount of evaded taxes does not exceed 25,000 euros. This threshold has hitherto been set at 50,000 euros. In cases involving larger amounts, tiered penalties based on the extent to which taxes have been evaded shall fall due. Thus, in cases involving a sum of evaded taxes of up to 100,000 euros, a ten per cent penalty shall fall due. For amounts greater than 100,000 euros, the penalty is 15 per cent, and 20 per cent for one million euros and above. In addition to the evaded taxes, the resulting interest also has to be paid immediately. Moreover, the adjustment period will be doubled from five to ten years.
Opinion of GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London: If the legislative amendment comes into force, it will be significantly more difficult to return to a state of tax compliance with a voluntary declaration from 2015, yet it remains possible. It should also be borne in mind here that tax offences from the past ten years already have to be disclosed in particularly severe cases.
Given the complexity of voluntary disclosure, it is advisable to consult lawyers and tax advisors who are experienced in the field of tax law. If the voluntary declaration is prepared alone or with the help of standard templates, there is a high risk of it being flawed and therefore ineffective.
Since the tightening of the rules for voluntary disclosure will, in all likelihood, come into force on January 1, 2015, it is recommended that you submit the voluntary declaration this year.