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Germany Mulls Stricter Tax Amnesty Rule

02 May 2013   (0 Comments)
Posted by: Author: Ulrika Lomas
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Source: Ulrika Lomas (Tax-news, Brussels)

Marking a dramatic U-turn, the ruling Christian Democratic Union (CDU) party is reportedly now considering the idea of toughening conditions for voluntary tax declarations. The tax amnesty provision was first restricted by the black-yellow coalition Government back in 2011.

At the request of German Chancellor Angela Merkel (CDU), a working group is to be set up to examine how the regulation, which grants individuals impunity from prosecution following a voluntary declaration of undeclared assets, could be further tightened, as part of efforts to clamp down on tax evasion.

Confirming the coalition's willingness to look again at the regulation, Government spokesman Steffen Seibert warned against any hasty amendments being made to the criminal tax law.

Although the CDU and coalition partner the Free Democratic Party have up to now steadfastly dismissed the idea of abolishing the rule, the Government has come under increasing pressure to act. The news that Bayern Munich football club chairman Uli Hoeneß submitted a voluntary declaration to the German tax authorities, regarding an undeclared Swiss account, provoked renewed outrage from Opposition parties. The Social Democrats, Green Party, and the Left Party have all called again for the regulation to be removed.

Germany's ruling coalition first made conditions stricter back in March 2011. It agreed that individuals with undeclared assets in excess of EUR50,000 (USD65,867) would only be granted impunity in future following a voluntary declaration provided that they pay an extra charge of 5% on the undeclared taxes.

Furthermore, the coalition stipulated at the time that impunity from prosecution would only be granted provided that information on all assets qualifying for tax is "completely and accurately” given during the voluntary disclosure. As a result, individuals providing only "piecemeal” information will not be granted impunity.

The timeframe for submitting voluntary disclosures was also amended in 2011. Taxpayers are now only granted impunity if the voluntary disclosure is submitted prior to the issue of a written notice.



Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

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