• Tax Evasion: More Than 18,000 Proceedings Suspended Following Voluntary Disclosure
  • April 28, 2015 | Author: Michael Rainer
  • Law Firm: GRP Rainer LLP - Stuttgart Office
  • The number of voluntary declarations in cases of tax evasion is increasing and with it the number of suspended proceedings. More than 18,000 proceedings were suspended in 2013 according to media reports.

    GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, D??sseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London - www.grprainer.com/en conclude: The exchequer and tax evaders benefit in equal measure from voluntary disclosure in cases of tax evasion, as the state is delighted with the surge in revenues and more than 18,000 proceedings were suspended in 2013 following voluntary disclosure, thereby allowing the tax evaders to return to a state of tax compliance. In comparison with 2012, the number of suspended proceedings has thus risen by more than 50 per cent.

    There is a variety of reasons for the increasing number of voluntary declarations and suspended proceedings: Cases involving prominent tax evaders, the purchase of CDs on tax evaders, the increased willingness of states to cooperate with one another as well as the planned tightening of the rules for voluntary disclosure from 2015.

    However, for a voluntary declaration to be able to lead to the suspension of proceedings it must be submitted on time and complete. If the voluntary declaration is flawed then the threat of a conviction for tax evasion remains. That is why a voluntary declaration ought not to be drawn up alone or with the help of standard templates. It is safer to turn to lawyers and tax advisors who are experienced in the field of tax law. They can examine each case individually and know what information has to be included in the voluntary declaration so that it can take effect. In order to be able to suspend proceedings, the tax liability plus interest and, as the case may be, a due penalty also have to be paid within a relatively short period of time.

    It is expected to be substantially more expensive from 2015. A voluntary declaration will then only lead to complete immunity 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. Accordingly, sums of evaded taxes of up to 100,000 euros will incur a ten per cent penalty. The penalty amounts to 15 per cent for sums over 100,000 euros and 20 per cent for one million euros and above. It is nonetheless still possible in 2015 to avoid a conviction for tax evasion by means of a voluntary declaration.