• Tax Evasion: Retroactive Group Inquiries Increase Risk of Detection - Voluntary Disclosure
  • November 18, 2015 | Author: Michael Rainer
  • Law Firm: GRP Rainer LLP - Bonn Office
  • Tax dodgers who have already closed their accounts with untaxed income from capital in Austria or Switzerland still need to worry about detection. Voluntary disclosure continues to present a way out.

    GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London - www.grprainer.com/en conclude: Untaxed income from capital in accounts located in Switzerland or Austria has not been safe from access by the German authorities for quite some time, but even tax evaders who have reacted to this situation and closed their accounts ought not to feel secure as a result of this. The German exchequer is able to discover tax evasion by means of so-called group inquiries, and these can be retroactive in nature.

    German tax investigators can submit these group inquiries in relation to suspicious categories of persons with accounts in Austria or Switzerland. In doing so, it is not necessary to have specific grounds for suspecting a particular person. Financial institutions in Switzerland and Austria are obliged to provide the authorities with information. They do not have to inform their clients who are affected by this. Group inquiries can have retroactive effect going back to January 1, 2011 in Austria and February 1, 2013 in Switzerland. This enables tax investigators to track tax evaders who closed their foreign accounts some time ago.

    Those affected are still able to avert criminal prosecution and possible convictions for tax evasion by means of a voluntary declaration. Having said that, this is only possible if the tax evasion has not yet been detected by the authorities. Although the risk of being discovered is rising, a voluntary declaration should not be prepared rashly, as it can only lead to immunity if it is complete and error-free.

    That is why a voluntary declaration ought not to be prepared alone or with the help of standard templates, because mistakes are then almost inevitable and this results in the voluntary declaration failing. It is safer to consult lawyers and tax advisors who are experienced in the field of tax law. They can examine each case in detail and know which documents and information need to be included in the voluntary declaration for it to be able to lead to immunity.