27. Jun 17

Voluntary declaration for tax evasion still possible

While the number of voluntary declarations for tax evasion is declining, voluntary disclosure remains possible and is the only way of avoiding the imminent prospect of a conviction for tax evasion.

Following the boom years, the number of voluntary declarations for tax evasion has since fallen sharply. Notwithstanding this, the assumption still stands that untaxed income continues to be deposited in foreign accounts. Tax evaders should anticipate these illicit earnings being discovered now more than ever, as there will be no easing up in terms of the cross-border efforts in the fight against tax evasion. Moreover, tax investigators now have a powerful tool at their disposal in the form of the automatic exchange of financial information.

We at the law firm GRP Rainer Rechtsanwälte would advise anyone who is still concealing untaxed income from the exchequer that it remains possible to submit a voluntary declaration leading to immunity. However, the matter should not be put off any longer due to the increased risk of detection. Having said that, the voluntary declaration needs to be submitted before the tax evasion is discovered by the authorities for it to be capable of leading to immunity. In addition, it needs to be complete and free from errors. To this end, it is necessary, among other things, to disclose all information from the past ten years that is relevant from a tax perspective. This requires meticulous preparation of the voluntary declaration as well as expert advice.

For a layperson, it is almost impossible to satisfy the stringent requirements laid out by the legislature for voluntary disclosure to lead to immunity. Those who nonetheless attempt to prepare a voluntary declaration on their own or with the help of standard templates found online are taking a big risk; it is almost impossible to account for all of the complex processes in this manner, and even minor errors can result in the voluntary declaration failing to lead to immunity. In that case, high fines and severe custodial sentences are still a possibility in the event of a conviction for tax evasion despite voluntary disclosure.

To avoid this risk, tax dodgers who wish to return to a state of tax compliance can turn to lawyers and tax advisors who are experienced in the field of tax law. They are able to account for the complexity of each individual case and know which documents and information the voluntary declaration needs to include for it to be capable of leading to immunity.

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