Investigating authorities in criminal tax proceedings

Fine and Criminal Investigation Office (Bußgeld- und Strafsachenstelle/BuStra) and Tax Investigation Office (Criminal Investigation Division/Steuerfahndung/Steufa)

The positions of the investigative authorities in criminal tax proceedings initially appear confusing and unclear to the person concerned. Understanding is already made more difficult by the fact that, in addition to the well-known Tax Investigation Office (Steufa), not only the largely unknown Administrative Offices for Fines and Criminal Matters (BuStra, elsewhere StraBu), but also other law enforcement bodies with different powers and tasks are responsible. In addition, there are the inconsistent organizational forms in the various federal states.

The norms of general criminal procedure law apply to criminal tax proceedings pursuant to Section 385 (1) AO, but only "insofar as the following provisions do not stipulate otherwise". This means that in criminal tax proceedings the AO regulations are to be applied with priority, which in §§ 385 to 408 AO have some special features compared to the general criminal procedure law. (Sections 409 to 412 AO regulate the tax penalty proceedings.) In addition to the provisions of the AO and the general criminal procedure law, the tax authorities must observe a number of administrative regulations in criminal tax proceedings. The most important of these are the "Instructions for Criminal and Fine Proceedings (Tax)" usually referred to as AStBV (St) or ASB. They are applied throughout the Federal Republic of Germany and apply to all employees of the tax investigation office, the fine and criminal case offices and other offices of the tax authorities, insofar as cooperation with the tax investigation office or fine and criminal case office is concerned or if they take measures in criminal or fine proceedings, No. 1 para. 1 sentence 2 AStBV. The rules of the AStBV are intended to serve the uniform handling of criminal tax procedural law in Germany and the smooth cooperation of investigating authorities and courts.

Relationship between the Office of Fines and Criminal Matters and the Public Prosecutor's Office

According to Article 92 of the Basic Law, the punishment of criminal offenses is entrusted exclusively to the criminal courts. Therefore, neither the public prosecutor's office, nor the fine and criminal case offices, nor even the tax investigation office may impose penalties. (This is different from §§ 410, 412 I RAO 1919; §§ 445, 447 I RAO 1931, which were declared unconstitutional by the Federal Constitutional Court in its ruling of June 6, 1967 [file number 2 BvR 375, 53/60, 18/65, published in BVerfG 22, 49 = NJW 1967, 1219 et seq.]).

The prosecution and punishment of tax offences, on the other hand, is not assigned to the Tax Investigation Department, but to the Fine and Criminal Matters Department, and in exceptional cases also to the Public Prosecutor's Office. In this case, the Fines and Criminal Matters Office assumes responsibility pursuant to Sections 131 (3) and 36 (1) OWiG in conjunction with Sections 409 and 387 AOA. §§ Sections 409, 387 AO, the office performs the tasks of the competent prosecuting authority. Regulations on the legal status and special features of the procedure up to enforcement can be found in Part 3 No. 93 ff. AStBV.

The various investigating authorities have partly different powers and tasks. In addition to the tax investigation department, these investigating authorities include the fine and criminal investigation departments, the public prosecutor's office, as well as courts and the police. Their tasks and powers are precisely defined.

The demarcation between the public prosecutor's office and the tax authority results from § 386 Para. 2- 4 AO and is regulated in No. 12- 18 AStBV (St). As far as the tax authority is responsible, in the federal states due to § 387 Abs. 2 and/or § 17 Abs. 2 S. 3 and 4 FVG (financial administration law) in connection with. § Section 387 (1) of the Fiscal Code (AO), responsibility for the area of several tax offices is generally transferred to a central office at which a department for fines and criminal matters is set up (in some cases, there are tax offices with exclusive responsibility in this regard, known as the Tax Office for Investigations and Criminal Matters (FA FuSt) or the Tax Office for Criminal Tax Matters and Tax Investigations).

The tax authority is independently responsible as an investigative authority for the investigation procedure, it investigates exclusively in the case of suspicion of a tax offense § 386 para. 2 no. 1 in connection with § 369 AO or in the case of a tax offense § 386 para. 2 no. 1 in connection with § 369 AO. § 369 AO or in the case of an equivalent offense. The Office of Fines and Criminal Matters is responsible for carrying out the prosecutorial duties for the tax authority and is thus responsible as the "public prosecutor's office of the tax authority" for all procedural decisions. It is not bound by instructions from the public prosecutor's office, but acts on its own responsibility. Its investigative work is not an auxiliary activity for the public prosecutor's office, but a public prosecutor's activity. In the case of suspicion of a tax offense, the administrative office for fines and criminal matters must initiate criminal tax proceedings (§ 397 AO, §§ 152 para. 2, 160 para. 1 StPO). The BuStra is informed of the grounds for suspicion by employees of the assessment offices in the tax offices, but above all by clerks of the external audit services and the tax investigation department. Other authorities, the police, customs, the public prosecutor's office and the courts also inform the BuStra of grounds for suspicion in accordance with § 116 AO. In addition, the tax authorities repeatedly learn of tax evasion through reports (sometimes anonymously).

As soon as the BuStra has initiated criminal tax proceedings, it must conduct the investigations §§ 386, 399 AO and take or arrange for all necessary measures. Despite the independent investigation competence §§ 386 I 1, II, 399 I AO and the conclusion competence i. S. d. § 400 AO the tax authority may not investigate the case in the opinion of the BGH however up to the charge ripe without participation of the public prosecutor's office independently. This is not compatible with the distribution of roles regulated in § 386 IV AO. The public prosecutor's office may take a criminal tax case to itself at any time. This means that the public prosecutor's office may not give instructions to the investigating tax investigators in the criminal tax proceedings, which are conducted autonomously by the tax authorities (§ 386 II AO). However, even in these cases, the public prosecutor's office remains the "master of the proceedings" to the extent that it can take over the proceedings at any time in order to implement its ideas in accordance with § 386 IV 2 AO (evocation). This position of the public prosecutor's office corresponds to a duty of the tax authorities to inform the public prosecutor's office. The tax authority must therefore inform the public prosecutor's office at an early stage of all investigation proceedings dependent on the tax investigation, in cases where evocation is not remote.

If the public prosecutor's office conducts the investigation after evocation, the position of the BuStra is limited to the tasks of the police authorities in accordance with §§ 402 para. 1, 399 para. 2 sentence 2 AO and its employees are therefore investigators of the public prosecutor's office with the rights and obligations in accordance with §§ 160, 161, 163 StPO in conjunction with § 402 AO. § 402 AO, thus have to follow the instructions of the public prosecutor's office.

Witnesses are then also no longer obliged to appear before the BuStra, as it also does not have the corresponding rights or powers of Section 161 a (1) and (2) StPO via Section 161 a (4) StPO, because it is then also not a public prosecutor's office alongside the public prosecutor's office. When obtaining information, however, the BuStra can refer to Section 161 (2) sentence 2 of the Code of Criminal Procedure. In practice, the public prosecutor's office hands the criminal tax case back to the BuStra if no crime has been committed in the sense of criminal proceedings.

In case of imminent danger, the BuStra can also order and carry out searches and seizures as well as provisional arrests itself. As a rule, however, it will use the assistance of the tax investigation department to carry out these measures. For the assumption of the existence of imminent danger, the case law of the BVerfG must be observed. According to this case law, imminent danger is an undefined legal term. The existence of danger in delay must be substantiated with facts related to the individual case, so that the official is not granted any discretion or leeway for assessment in this respect. The BuStra official must always try to obtain the order of the judge because of the judge's prerogative. Only if this is not possible without jeopardizing the purpose of the investigation or if the judge cannot decide in time due to the complexity of the factual and legal situation, the tax official may assume imminent danger and order the necessary measures himself. The BuStra also has the right to request surrender under Section 95 of the Code of Criminal Procedure (StPO), to look through papers during searches Section 110 (1) of the Code of Criminal Procedure (StPO) and to order the seizure of objects and pecuniary benefits Section 111 b of the Code of Criminal Procedure (StPO), as well as the physical examination of defendants and third parties Sections 81 a- c of the Code of Criminal Procedure (StPO).

Once the investigation has been completed, the BuStra will either apply for the issuance of a penalty order (Sections 400, 406 AO), hand the case over to the public prosecutor (Section 386 (4) AO) or discontinue the proceedings (Section 398 AO, Sections 153 et seq., 170 (2) StPO). With these three possibilities, the independent investigative power of the BuStra ends. In everything that follows, the public prosecutor's office is once again compulsorily involved and the BuStra only has dependent investigative competence.

As far as local jurisdiction is concerned, § 388 ff. AO apply. In this respect a competence results after the place of the crime (§ 388 exp. 1 No. 1 1. Alt. AO), the place of the crime discovery (§ 388 exp. 1 No. 1 2. Alt. AO), the taxation competence with introduction (§ 388 exp. 1 No. 2 AO), the domicile, the usual stay (§ 388 exp. 3 AO) and finally due to subject connection (§ 389 S.1 AO). In compliance with Section 385 (1) AO, these jurisdiction rules take precedence over those under the Code of Criminal Procedure, with Section 29 AO, Section 143 (2) GVG additionally opening up jurisdiction in cases of imminent danger. Investigative examiners can carry out investigative actions throughout Germany, because the local investigative competence of the BuStra extends in principle to the entire Federal Republic in accordance with No. 145 AStBV. The reason is that the AO considers the entire federal territory as a tax administration unit. Therefore, the competent tax office of one federal state can also carry out official acts in the territory of another federal state. However, the possibilities of investigation end at the state borders of the respective country. Therefore, sovereign acts, such as investigations in taxation and criminal proceedings, may, according to the rules of international law, in principle only be carried out on the state's own territory. Exceptions to this rule are only permissible on a case-by-case basis or in narrowly defined groups of cases on the basis of intergovernmental agreements.

Task and authority of tax investigations

Whereas the AO does not expressly address the offices responsible for fines and criminal matters, but instead exercises the competence of the tax authority to investigate criminal proceedings within the authority, the tasks, powers and legal position of the tax investigation office and its officials are expressly regulated in Sections 280 and 404 of the AO. In criminal tax proceedings, the tax investigation office has the same powers and duties that the Code of Criminal Procedure imposes on police officers (Section 404 sentence 1 AO). Its officers are investigators of the public prosecutor's office (§ 404 S. 2 2. Hs. AO). Section 208 AO assigns criminal and fiscal tasks to the tax investigation service. One speaks therefore of the double function of the Steuerfahndung. The criminal task of the tax investigation results from § 208 Abs. 1 S. 1 Nr. 1 AO. According to this, the tax investigation has to investigate tax crimes and tax offences. It must observe the principle of legality. The powers of the tax investigation office under criminal procedure are also available to it, if necessary, for periods that are time-barred, if it is to be expected that, on the basis of findings relating to periods that are already time-barred, indications may arise that are relevant for periods that are not time-barred.

According to Section 208 (1) Sentence 1 No. 3 of the German Fiscal Code (AO), one of the tax investigation's tasks is to uncover and investigate unknown tax cases. With the so-called preliminary investigation, the tax investigation department fulfills its monitoring task within the framework of general tax supervision. According to this, it may investigate unknown tax matters with known and unknown taxpayers or also conduct investigations into unknown taxpayers. The prerequisite is that, on the basis of concrete indications or general experience, there is a possibility of a tax claim, i.e. an objective tax evasion. If this is the case, there is sufficient cause.

According to Section 208 (2) AO, further tax-related tasks of the tax investigation department are external audits or other tax investigations at the request of the competent tax authority as well as other tasks assigned to it within the scope of the competence of the tax authority.

The tax investigation unit receives SARs on the basis of reports, other authorities outside the tax administration, primarily from the police, customs and public prosecutors, but also from district administrative authorities, the labor administration, social security institutions and courts. However, the majority of Steufa's work is made up of cases based on reports from its own tax administration.

In addition, the tax investigation unit also handles cases based on self-investigations. If, for example, facts are discovered in an ongoing investigation case that give rise to the suspicion of further tax evasion by third parties, the tax investigation department must of course also conduct these criminal proceedings.

The tax investigation department can carry out investigative actions throughout the entire federal territory. In accordance with the administrative instructions, the locally competent tax investigation offices must be requested for administrative assistance or must or should be informed in advance. The administrative assistance of the locally competent tax investigation offices is helpful in any case, e.g. because of their local knowledge. At least for this purpose, each tax investigation office has a corresponding on-call service.

From the criminal-legal main task of the tax investigation after Sec 208 exp. 1 p. 1 No. 1 AO results therefore in accordance with Sec 404 AO that the emphasis of the tax investigation work lies with the police, criminal-procedural activity. In doing so, it makes use of all the options available to the tax authorities under the Code of Criminal Procedure. Searches, seizures, interrogations, provisional arrests, etc. are everyday activities of tax investigators. In cases of imminent danger, the tax investigation department may also order searches and seizures itself and make provisional arrests.

The tax investigation department also has the right of first access, the receipt of criminal complaints (Section 158 of the Code of Criminal Procedure), the collection of information from third parties (Sections 163, 161 of the Code of Criminal Procedure), the issuance of a warrant (Section 131 para. 2 StPO), the seizure of forfeiture or confiscation objects (Section 111 b, e StPO), the arrest of troublemakers (Section 164 StPO), the establishment of identity (Section 163 b StPO) and the transmission of the investigation result to the BuStra (Section 163 para. 2 StPO).

In some cases, various special investigation groups (SEG or SEK) have been created in the tax investigation offices for the various areas. In some cases, investigations are also conducted there without special organizational forms, possibly for a limited period of time, focusing on the following areas: Money laundering and organized white-collar crime, bogus invoices in the ancillary construction trade, illegal employment and moonlighting, audits of artists and athletes subject to limited tax liability, Internet investigations, VAT carousel and VAT fraud cases.