Amended tax returns

After a proposed agreement between the Federal Government of Germany and Switzerland it can become very unpleasant for tax evaders.

A citizen who is domiciled or permanently resident in Germany is taxed on his total world income. This means that all income he obtains in Germany or outside of Germany is to be reported to the Treasury and taxed. Already raised taxes abroad can be credited.

It is not a criminal offense in itself for a federal citizen to have an account abroad. Income that he made ​​abroad because of these accounts fall under tax liability and have to be reported. Should the taxpayers have relied upon having done their duty with the payment of withholding tax on anonymous accounts, it could be that, based on the latest developments, tax investigation shows an interest in them.

According to newspaper reports the Federal Government is planning, in collaboration with the Swiss authorities, to uncover all the hidden accounts that still exist in Switzerland. In the future the Swiss Confederates want to provide more information to the Federal Government than before. Thus, it seems the end of the tax haven Switzerland has been rung in, the expulsion from the Garden of Eden appears inevitable.

Even now the Swiss banking secrecy - once the holy grail of the Confederates - no longer seems to be safe. In times of circulation and purchase of data CDs, the contractual agreement of confidentiality degenerates into a farce anyway. The customer becomes see-through. According to tax authorities, income becomes traceable through information requests from banks. Tax evasion inevitably becomes known in the course of requests for information.

Punishable by imprisonment for up to five years or a fine is, who

• gives incorrect or incomplete information to the tax authorities or other authorities about significant tax facts, who, contrary to his duties, keeps financial authorities in ignorance about significant tax facts (...).

• and thereby reduces taxes or obtains unjustified tax benefits for himself or another person.

• Even the attempt is an offense.

Particularly serious cases can lead to a prison sentence of six months to ten years.

Who corrects incorrect or incomplete information to the tax authorities or supplements or makes up for omitted statements is exempt from punishment in this respect. Insofar, the legislature opens up the possibility of a withdrawal to tax evaders and smoothes the way to impunity. With this possibility of withdrawal, however, some special features need to be considered.

The KWAG lawyers will gladly advise you as to whether

• a withdrawal from a tax reduction is still possible and
• any further action has to be takenregarding this case.

 

How long that possibility will exist remains to be seen. Currently the first voices in political debate are already calling for the abolition of this privilege.

For further information please contact lawyers Matthias Berger, Jürgen Moser and Constantin Wesser at our company.