• Tax Evasion: Time Is Running Out For Voluntary Disclosure
  • December 18, 2015
  • Law Firm: GRP Rainer LLP - Cologne Office
  • Be it as a result of the purchase of CDs containing information on tax evaders or cooperation among countries, things are becoming increasingly difficult for tax evaders. Voluntary disclosure represents the only way out for them.

    GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London - www.grprainer.com/en conclude: The German exchequer continues to up the ante in the fight against tax evasion, availing itself of the possibilities available to it. The German state of North Rhine-Westphalia acquired another substantial set of data only a few days ago concerning possible instances of tax evasion. Shortly thereafter, the German Bundestag gave the go-ahead to the automatic exchange of fiscal data. Currently, more than 70 countries wish to participate in this exchange of information, including several former tax havens. Banking secrecy is gradually becoming a thing of the past.

    Tax evaders cannot continue to assume that their untaxed income from capital in foreign accounts will be able to remain hidden from the tax authorities. They only way for them to avoid criminal prosecution and a potential conviction for tax evasion is to submit a voluntary declaration leading to immunity. However, this is only possible if the tax evasion has not yet been discovered by the authorities. Time is running out.

    Despite the increasing risk of detection, a voluntary declaration ought to be very carefully prepared and certainly not in a rush, as a voluntary declaration can only lead to immunity if it is complete and error-free. It is nearly impossible for a layperson to meet the complex requirements pertaining to a voluntary declaration, which is why he should not draw it up alone or with the help of standard templates, otherwise mistakes are almost inevitable. This would then result in the voluntary declaration failing.

    In order to prevent this from happening, lawyers and tax advisors who are experienced in the field of tax law ought to be entrusted with voluntary disclosure. They know what information and documentation need to be included in the voluntary declaration and can accordingly prepare it in such a way that it leads to immunity.

    In cases involving sums of evaded taxes amounting to no more than 25,000 euros, there is no threat of further sanctions following a successful voluntary declaration. If the amounts are higher than this, the tax authorities will impose penal surcharges that need to be paid together with the tax liabilities plus interest.