Tax evasion: Automatic exchange of information to trigger new wave of voluntary declarations

COLOGNE, Germany - March 18, 2016 - PRLog -- GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: According to a statement by North Rhine-Westphalia's Minister of Finance, Norbert Walter-Borjans, in an interview with Der Tagesspiegel, the German exchequer has collected around five billion euros in the past five years from voluntary declarations submitted in response to tax evasion. He went on to say that while the number of voluntary declarations went down last year, large sums of illicit funds are still thought to be deposited in foreign accounts. North Rhine-Westphalia's Minister of Finance is therefore anticipating another increase in the number of voluntary declarations when the automatic exchange of bank data among more than 70 countries begins for some in 2017 and others in 2018. Former tax havens such as Switzerland and Austria will also be participating in the exchange of information.

This means that there is going to be another appreciable increase in the risk of tax evasion being discovered. If tax evasion is detected, the offenders can be faced with severe penalties ranging from fines to custodial sentences. It is possible with the help of a voluntary declaration to avoid a potential conviction for tax evasion. Having said that, voluntary disclosure is only an option if the crime has not yet been discovered by the authorities. Time is starting to run out, but it is important not to submit a voluntary declaration in a rush if it is to have a chance of leading to immunity; this can only happen if it is both complete and error-free in addition to being on time. However, it is almost impossible for a layperson to meet the demanding requirements set by the legislature with respect to voluntary disclosure.

That is why a voluntary declaration ought not to be prepared alone or with the aid of standard templates. The risk of mistakes being made in the process and thus of the voluntary declaration failing is high. It is safer to turn to lawyers and tax advisors who are competent in the field of tax law. They are able to assess each case on an individual basis and know which documents and information the voluntary declaration has to include for it to be able to lead to immunity.

If the amount of evaded taxes does not exceed 25,000 euros, then the threat of further sanctions ceases to exist following a successful voluntary declaration. In cases involving larger amounts, a penal surcharge needs to be paid above and beyond the tax liabilities and interest.

http://www.grprainer.com/en/legal-advice/tax-law/voluntar...