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Baden-Württemberg Seeks Strengthened Tax Amnesty Provisions

Monday, 08 July 2013   (0 Comments)
Posted by: Author: Ulrika Lomas
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Author: Ulrika Lomas

Despite a lack of support for the idea in the German Bundestag, or lower house of parliament, Baden-Württemberg's Finance Minister Nils Schmid has reiterated the importance of toughening the voluntary declaration provision contained in Germany's criminal tax law, to ensure that, in future, German tax evaders provide information on undeclared income covering the last ten years.

German taxpayers electing to submit a voluntary declaration to the tax authorities are currently only required to provide information on unreported income covering the last five years, except in cases of serious tax offences involving undeclared sums in excess of EUR50,000 (USD64,959), when the reporting timeframe is extended to ten years.

In contrast, tax investigators require information dating from the last ten years for criminal proceedings. According to Schmid, this shows the discrepancy between the country's criminal tax law and its tax law, which urgently needs to be addressed.

As further evidence of the need for action, Schmid cited the fact that since February 2010, 13,000 voluntary declarations have been submitted by taxpayers in the German state of Baden-Württemberg, in connection with capital gains realized in Switzerland, with evaded taxes averaging around EUR26,000. Underlining the importance of ensuring tax justice, Schmid warned that tax evaders must not be able "to profit from this loophole."

Concluding, Schmid lamented the Bundestag's decision to reject Baden-Württemberg's application, calling for the voluntary declaration provision to be strengthened. The black-yellow Government, with its parliamentary majority in the Bundestag, simply does not take tax justice seriously, Schmid said.

The Minister's remarks follow reports that a record EUR1.2bn in fiscal revenues was collected in Germany in 2011 from criminal proceedings against alleged tax fraudsters. This figure compares to EUR791m collected in 2010, EUR866m derived in 2009, and EUR890m generated in 2008.

In 2010, a total of 95,223 criminal investigations were carried out in Germany, compared to 68,408 in 2011. So far, the number of voluntary declarations filed last year stands at 10,760..



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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