Voluntary Disclosure

Voluntary disclosure (Selbstanzeige) under § 371 of the German Fiscal Code (Abgabenordnung, AO) allows taxpayers to subsequently declare evaded taxes and, under specific conditions, obtain immunity from prosecution. It is a statutory mechanism for "returning to tax honesty".

For the disclosure to be effective, all unbarred tax offences relating to one type of tax must be declared in full and correctly – at minimum for the past ten calendar years. A partial disclosure is not sufficient. In addition, the back taxes, interest on the evaded amount and – above an evasion amount of EUR 25,000 per offence – a tiered penalty surcharge must be paid within a deadline set by the tax office.

Statutory blocks such as the announcement of an audit order, the appearance of a tax official or the discovery of the offence preclude effectiveness. Given the demanding formal requirements and the far-reaching criminal consequences, a voluntary disclosure should never be filed without prior advice in tax and criminal tax law. A defective disclosure may actually reveal a previously undetected matter and frequently leads directly into criminal tax proceedings.