• Tax Evasion: Only Those Who Take Notice of the Details Pertaining to Voluntary Declarations Emerge Unpunished
  • December 10, 2014 | Author: Michael Rainer
  • Law Firm: GRP Rainer LLP - Frankfurt am Main Office
  • It is a misapprehension to believe that a voluntary declaration automatically leads to immunity following tax evasion. Strict rules apply for voluntary disclosure.

    GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London - www.grprainer.com/en conclude: The statistics are clear. More and more tax evaders are searching for a way back to a state of legal tax affairs; the number of voluntary declarations continues to rise. However, a voluntary declaration does not automatically lead to immunity from punishment. This can only be achieved if the requirements for a voluntary declaration are strictly complied with. The important point here is: The voluntary declaration must be made in due time - that is to say, before the tax evasion is discovered - and it has to be complete. Particularly with regard to completeness, the devil is often in the detail.

    Furthermore, it should be noted that a sum of evaded taxes only remains unpunished up to 50,000 EUR. In cases involving higher amounts, a penalty surcharged is imposed. Moreover, the tax evader must be in a position to be able to subsequently pay the evaded taxes and, where appropriate, a punitive surcharge within a relatively short period of time.

    Those who prepare a voluntary declaration on their own or with the help of standard forms are taking a big risk that it fails to have the desired effect, because each case is different and must accordingly be assessed individually. The completeness of the voluntary declaration, in particular, can lead to problems here. It is therefore advisable to turn to lawyers and tax advisors who are experienced in the field of tax law and can accurately appraise the specifics of each case and prepare the voluntary declaration in such a way that it is exhaustive. The competent tax office will then issue a new tax assessment notice and, as the case may be, impose a punitive surcharge as well. The matter is resolved as soon as the tax evader pays the sum.

    However, attention should also be paid to the fact that the rules for voluntary declarations will in all probability be substantially tightened from 2015. Considerably higher penalty surcharges are then expected to fall due and relevant tax matters have to be disclosed from the past ten years instead of five years as before. This will make it, in particular, substantially more difficult to submit a complete voluntary declaration.