One focus of our practice is advising and defending clients in criminal tax cases. Criminal tax law has gained in importance in recent years. This is due in part to high-profile (and in our view illegal) purchases of tax CDs by the state and its authorities. It also stems from the fact that the tax authorities as a whole are increasingly using criminal law as a cudgel to crush and eliminate complex tax cases, i.e., using the threat of criminal penalties to coerce taxpayers into agreeing actual settlements.
It is not uncommon to see stagnating tax audits give way to criminal proceedings as a means for the tax authorities to move the matter along. The case law of the German Federal Court of Justice (BGH) has done the rest, increasing the threat of penalties by lowering the relevant loss amounts. For example, the Court ruled that a particularly serious case of tax evasion is now to be assumed where the alleged tax loss amounts to EUR 50,000 or more and a suspended sentence with probation is to be routinely denied where the tax loss amounts to EUR 1 million or more.
In recent years, we have successfully assisted our clients with numerous voluntary self-disclosures to avoid penalties. We usually coordinate our defense in the criminal tax proceedings with the client's tax advisor or another external expert. Our focus is on the criminal law implications and risks, which we assess and strategically structure in connection with the taxation process. This also includes ad hoc issues involving tax correction, contesting tax assessments and suspending the enforcement thereof, depositing advance payments and other considerations relevant under criminal law.
We understand the financial and personal pressures associated with voluntary self-disclosures and criminal tax proceedings, and do our part to help the parties involved sleep soundly again.
