Exemption from punishment for tax evaders: indulgence for five percent

Three years ago, the SPD called for the abolition of penalty-free voluntary declarations – and did not succeed.

Martin Luther didn’t think it was a good idea to pay money for the remission of sins. Picture: ap

It is a dejà vu experience. In 20, there was also a heated debate in Germany about abolishing voluntary disclosure. The occasion was the offensive purchase of CDs with tax data in North Rhine-Westphalia. Tax evaders became nervous and used the emergency exit to get away with it after all.

The SPD reacted quickly and presented a bill to "abolish the penalty-exempt voluntary declaration of tax evasion. The exemption from punishment violates the "sense of justice of tax-honest citizens". Even individual politicians from the CDU/CSU, such as CSU member of parliament Hans Michelbach, called for its abolition. In the vote in March 2011, however, the SPD motion received only the votes of its own parliamentary group and the Left Party. The CDU/CSU, FDP and Greens voted against it.

Instead, the Bundestag passed the Black Money Control Act presented by the federal government, which restricts the voluntary declaration in three respects, but essentially retains it.

Firstly, a voluntary disclosure will only be effective if the tax evader comes clean. A partial voluntary disclosure should not be able to prevent the penalty, not even for the admitted part of the evasion. Although this tightening is extremely relevant in practice, it is not a success for the governing coalition. Here, only a tightening of the BGH case law from May 2010 has been traced.

Penalty payment and interest on arrears

Secondly, a voluntary disclosure has since been considered late as soon as a tax audit is announced. Previously, the time limit was when the tax investigators showed up. Thirdly, the voluntary declaration now only applies to evaded taxes of up to 50,000 euros per year.

However, something very similar was introduced for larger offenses. Here, the repentant evader is now entitled to have the criminal proceedings discontinued if, in addition to the taxes and the usual interest on arrears of 6 percent, he pays a fine of a further 5 percent. This did not make much difference.

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