Contacts
Criminal law on tax offences
One of the firm's central areas of activity is criminal law in relation to tax offences, which is determined by substantive tax law. This field of law is now characterized more than ever before by a lack of consistency, a rapid rate of change and uncertainties in its interpretation and practical application. There are many ways of bringing criminal proceedings to a close. In general, however, reaching a settlement (i.e. a genuine understanding) in the taxation proceedings will also facilitate resolution of the criminal proceedings. Criminal investigations in tax cases are characterized by fiscal thinking.
The recent banking cases have led to a previously unimaginable increase in admissions to the tax authorities of false or incomplete tax returns. The intensity of prosecution has increased, and in the course of these events the investigatory services have increased their staff. Criminal law relating to tax offences has thus gained considerably in practical importance. Tax law in the Federal Republic of Germany is confusing and opaque even to tax lawyers. Frequent and short-lived changes to the applicable laws, regulations and decrees are not conducive to transparency. The dependence of criminal tax law on fiscal proceedings – where any deviation between actual taxation (as declared) and tax owing (according to the laws and regulations), when coupled with intent, constitutes the offence of tax evasion – always results in criminal investigations when the outstanding sums in question reach a certain amount (which however differs considerably from region to region). Criminal tax proceedings have thus become a mass phenomenon, which is consequently also handled in blanket fashion by the authorities and the courts.
The globalization of the economy (shifting of profits into foreign countries with low taxation rates) and new business channels (e-commerce) are increasing the pressure on defence counsel and tax advisers to provide specialized professional services. Only in cooperation between tax consultants and tax lawyers on the one hand and specialists in criminal law on the other hand is it possible to cover all eventualities. The interlocking of criminal and fiscal law is reflected on the procedural level by the double function of the tax evasion investigation service, which examines both the fundamentals of assessment and the circumstances in cases of suspected tax offences.
The guidelines for handling of criminal cases relating to tax offences can be summarized as follows: Sounding out of the opportunities for a voluntary declaration before investigations are commenced, dominance of fiscal considerations on the part of the authorities and complex circumstances which may open up the way to a "genuine understanding" and application of Section 153a of the Code of Criminal Procedure, and the frequent necessity to draw out proceedings and so achieve resolution of the matter by mutual consent. In difficult criminal proceedings relating to tax offences, the firm works together with eminent tax lawyers and tax consultants. This cooperation is the guarantor of concerted forces leading to an effective solution in the interests of our client.
Your contact:
M. Katzung, lawyer, tax consultant and specialist in tax law (Düsseldorf)