- Voluntary Disclosure is the Only Solution to Tax Evasion
- November 4, 2015 | Author: Michael Rainer
- Law Firm: GRP Rainer LLP - Stuttgart Office
- Ever since the first CD on tax evaders was purchased in 2006, the number of voluntary declarations concerning tax evasion has risen dramatically. This remains the only way of returning to a state of tax compliance.
GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London - www.grprainer.com/en conclude: The purchase of a CD on tax evaders in 2006 was the first time the pressure on tax evaders had been significantly increased. Buying these kinds of data carriers remains controversial. The international struggle against tax evasion has since been expedited by numerous measures and cooperation among countries. Even in former tax havens such as Switzerland and Austria, banking secrecy is almost a thing of the past. It is now scarcely possible for untaxed income from capital in foreign accounts to remain hidden from the tax authorities.
With more than 50 countries participating in the automatic exchange of fiscal data from 2017, things will once again become considerably more difficult for tax evaders. The risk of being caught for tax evasion is high, but it is still possible to return to a state of tax compliance by means of a voluntary declaration. As soon as the tax evasion is discovered, voluntary disclosure is no longer possible. Those concerned should therefore take action.
Yet even though the risk of detection is increasing, a voluntary declaration ought not to be submitted in a rush; it can only be effective if it is complete and error-free, thus the motto “rigour before speed”. Generally speaking, it is not possible for laymen to be sufficiently thorough if they attempt to prepare an exhaustive voluntary declaration on their own or with standard templates. There are many potential sources of errors and even small mistakes can cause the voluntary declaration to fail.
In order to prevent this from happening, lawyers and tax advisors who are experienced in the field of tax law should be entrusted with voluntary disclosure from the outset. They are able to assess the particulars and specific circumstances of each individual case and prepare the voluntary declaration in such a way that it is effective.
If a voluntary declaration is successful, tax evasion can go unpunished in cases concerning sums of evaded taxes of up to 25,000 euros. If larger amounts are involved, the tax authorities will impose penal surcharges that need to be paid in addition to the tax liabilities plus interest.