Tax Evasion

Tax evasion (Steuerhinterziehung) is the central offence of German criminal tax law and is set out in § 370 of the Fiscal Code (Abgabenordnung, AO). Anyone who provides the tax authorities with incorrect or incomplete information about facts of tax relevance, or who leaves them in ignorance in breach of duty, and thereby reduces taxes or obtains unjustified tax benefits, commits this offence.

The offence is punishable by a fine or imprisonment of up to five years. In particularly serious cases – such as a large evasion amount of EUR 50,000 or more per offence, organised commission as part of a gang, or the use of sham companies – the maximum penalty rises to ten years' imprisonment (§ 370 (3) AO). For evasion amounts of one million euros or more per offence, the case law of the Federal Court of Justice (BGH) generally requires imprisonment that can no longer be suspended on probation.

Alongside criminal prosecution, evaders face interest on evaded taxes of 0.5 % per month (§ 235 AO) as well as professional and commercial consequences such as the loss of commercial reliability. Even at the early stage of a mere suspicion – for instance once a tax audit begins – an experienced criminal tax defence lawyer should be involved immediately to coordinate duties to provide information and rights to remain silent.