Defense in tax criminal law
A professional defense in tax criminal proceedings requires specialization in criminal law as well as in tax law, since the taxation proceedings and the criminal proceedings are conducted equally next to each other and, pursuant to Section 393, Paragraph 1, Sentence 1 of the German Fiscal Code (Abgabenordnung), in accordance with the regulations applicable to the respective proceedings. The optimal result can only be achieved by keeping an eye on both procedures and having detailed knowledge of the Fiscal Code and the Code of Criminal Procedure as well as their interaction.
The following is an overview of the central areas of defense in tax criminal proceedings.
Focus topics in Tax Criminal Law
Audit and criminal tax proceedings
Cash accounting, summary risk assessment, IDEA, time series comparison, reference rates, (in)security surcharges - audits by the tax authorities harbor potential for conflict. The feared consequences are the estimation of the basis for taxation and the initiation of criminal tax proceedings. The announcement of the audit order or the appearance of the auditor are also grounds for blocking a voluntary declaration that exempts the taxpayer from prosecution.
Search and seizure in criminal tax proceedings
The tax criminal investigation department often uses the surprise situation of the search for interrogation attempts that should be resisted: "Confession is good for your soul, but bad for your case." Not only defendants have the right to the presence of their criminal defense attorney, witnesses may also call in a witness counsel at any time. As a matter of principle, no statements should be made without the presence of a lawyer.
Investigating authorities in criminal tax proceedings
Criminal tax law differs in many respects from "normal" criminal law, including its own investigative authorities: the tax investigation department and customs investigation department act instead of the police, and the tasks of the public prosecutor's office are largely performed by the fine and criminal matter departments (Bußgeld- und Strafsachenstellen, BuStra) or criminal and fine matter departments (Straf- und Bußgeldsachenstellen, StraBu). These are often located in special tax offices (FA FuSt, PrüStra, etc.).
Tax-related administrative offences
Negligent evasion of taxes is not a criminal offense - but it can be fined as reckless tax evasion. Tax offences within the meaning of Section 377 of the Tax Code also include the issuance of false receipts, etc. The amount of fines imposed for tax offences ranges from rather modest amounts to amounts that can destroy a company's existence.
Estimation in criminal tax proceedings
If the taxpayer's records are not to be used as a basis for taxation or if they are not (or no longer) available, the tax office may estimate the basis for taxation. The court can also make an estimate in criminal proceedings. Experience has shown that circumstances are often not taken into account, which can have a significant effect in favor of the taxpayer or the defendant.
Voluntary self disclosure in tax criminal law
Even after the great wave of voluntary disclosures exempting from punishment in the run-up to the tightening of the law on voluntary disclosures and the expansion of the exchange of information, especially with Switzerland, the voluntary disclosure remains a valuable instrument for clearing up misleading tax-relevant facts. Its prerequisites should always be kept in mind, also in the case of notifications of correction pursuant to Section 153 of the German Fiscal Code (Abgabenordnung).
Understanding the central norm of criminal tax law, the "tax evasion section" 370 of the German Fiscal Code (Abgabenordnung), requires knowledge of when "incorrect or incomplete information about tax-relevant facts" was provided and "taxes were thereby evaded". What is tax-relevant and what constitutes tax evasion can only be answered on the basis of formal and substantive tax law.
Tax debt and liability
Taxes that have been evaded must be paid in arrears (and interest must be charged at a high rate). Anyone who evades taxes for the benefit of third parties or participates in such an act can be held liable for the evaded taxes under Section 71 of the German Fiscal Code. Here, a good defense in criminal tax proceedings pays off twice: A reduction of the allegation of evasion regularly leads to a reduction of the additional tax claim or liability claim.
Penalties for tax evasion
Many criminal tax proceedings can be terminated - with or without a payment condition. In the case of higher evasion volumes, however, high fines, suspended sentences and unconditional prison sentences are also imposed - in some cases with a high impact on the press. For some years now, the 1st Senate of the Federal Court of Justice, which is currently responsible exclusively for criminal tax law, has had a decisive influence on sentencing practice.
Defendants in criminal tax proceedings often fear that secret investigative measures will be taken against them. In particular, they assume that their telephones will be tapped. However, the admissibility of telecommunications monitoring is subject to relatively high requirements. At present, "normal" tax evasion without qualification is not sufficient for this purpose.
Statute of limitations in criminal tax law and tax law
Criminal tax law is characterized by many special features. One of these is the statute of limitations, especially for serious tax evasion. In "normal" criminal law, so-called standard examples do not play a role in the statute of limitations, but they do in criminal tax law (Section 376 of the German Fiscal Code). The so-called absolute statute of limitations is also specifically regulated; it is 37.5 years for serious tax evasion (manslaughter: 40 years).
Asset forfeiture in tax criminal law
Since the reform of criminal asset seizure in 2017, tax investigators have appeared with two judicial warrants for searches: the warrant for the search has been joined by the warrant for the seizure of assets. Instead of just looking for evidence, the officers now also search for money and valuables; in parallel, the defendant's banks receive seizure orders by fax.
Child Benefit Evasion
The accusation of tax evasion due to unauthorized receipt of child benefits is often linked to the fact that parents have not informed the Family Fund about changes such as a move abroad. Criminal proceedings are carried out even if the parents have informed the residents' registration office of the move and assumed that this would automatically inform the family benefits office.