Self-disclosure: We help you on the road to tax honesty
Black money accounts or letterbox companies abroad, Panama or Pandora Papers, tax CDs – it should be clear to everyone by now: tax evasion is not a trivial offense. Honesty lasts the longest, honesty sleeps best and honesty is also the cheapest way to travel. However, if it does happen, you can often still avoid prison or high fines. We advise and assist you with voluntary declarations or the subsequent correction of income.
Tax evasion: it all comes out
More and more holders of secret foreign accounts – Panama, Switzerland, Luxembourg, Liechtenstein, etc. – received the blue letter from their bank. They were asked to close their accounts and specify a bank account to which the funds would be transferred. Cash payments are no longer permitted. They were asked to authorize the bank to transfer tax-relevant data to the tax authorities in the account holder’s home country in future. Now, good advice is not expensive, but rather inexpensive. After all, if the tax authorities find out about the illegal money, there is a risk of criminal proceedings for tax evasion.
In order to avoid high fines or even prison sentences, it is advisable to make a voluntary disclosure. To be effective, this must be received in good time before discovery, be formally correct and complete. Errors can quickly lead to the voluntary disclosure becoming ineffective. In order to get everything right, it is important to seek professional advice. Only a few tax consultants or lawyers are well versed in this topic. If something is overlooked and, for example, not all the requirements for a voluntary disclosure are met, the client suffers the loss. Soccer manager Hoeneß was sentenced to 3 1/2 years in prison.
Self-disclosure to the tax office: the way out for black money
To make one thing clear in advance: We do not advise on how you can evade taxes. However, if this has happened in the past through you or people you have inherited from and you want to clear the air, we are happy to help.
You can read why there is a high risk of detection if you have black money here. Compare the soundness of a reputable investment – and quantify the value of a good night’s sleep.
In our experience, if you have illicit money, you are almost certainly heading for discovery and conviction. As a withholding tax has been introduced on many capital gains since 2005 and this has been gradually increased to 35% (e.g. Switzerland), this is generally higher than the tax that the taxpayer would have to pay if he had declared the income in his income tax return as normal. Since the introduction of the final withholding tax, the flat-rate tax on investment income and capital gains is now only 26.4% at most in Germany. A tax amnesty for tax evaders is currently not in sight. Bank fees for custody account administration, account management, safekeeping, etc. are often much higher at foreign banks than in Germany, which often erodes the tax advantage for investors with foreign assets of less than €1 million. In addition, there are travel and accommodation costs to the foreign bank. There is a great – and justified – fear of being discovered if you have bank documents or more than €10,000 in cash per person with you when crossing the border and do not declare it. The risk of being noticed is high, as German tax authorities abroad sometimes photograph who enters a bank and who drives up with which German license plate.
You can read about the consequences you can expect if you are convicted of tax evasion and when such offenses become time-barred in separate articles.
In the case of a voluntary disclosure, the prosecution of a criminal offense can be waived under certain conditions. The conditions include declaring all income completely and correctly before the offense is discovered by the tax authorities – and paying the evaded taxes, including a surcharge, within a short period of time.
The amount of the surcharge depends on the amount of tax evaded. Up to €100,000 in evaded taxes it is 10%, between €100,000 and €1 million in evaded taxes it is 15% and over €1 million in evaded taxes it is 20% of the evaded taxes. However, the tax evader is spared further prosecution with high fines or even imprisonment if he declares everything correctly and pays the taxes, interest and surcharges on time. A voluntary declaration should only be made with professional help, as otherwise there is a risk that mistakes will be made and the offense will be prosecuted.
You can find out how a voluntary disclosure works here .
We have developed a “Tax Investigation Emergency Plan” for this purpose, which we will be happy to send you by e-mail. We always recommend tax honesty to you and all clients. Ask us for the “Tax Investigation Emergency Plan”.
We have many years of experience in providing discreet advice on voluntary disclosures. We quickly determine tax-relevant data for all non-barred assessment years – even if it is 20 years. We safeguard your interests and protect you if the tax office goes overboard (entering your home without a search warrant, promises made by the tax investigator that later do not have to be kept).
Play it safe with a voluntary disclosure and talk to us. So that you can sleep peacefully again. Read this report from SPIEGEL ONLINE.
