The effects of the 2021 coalition agreement on criminal tax law

In the coalition agreement presented on November 24, 2021, the SPD, the Greens and the FDP present a comprehensive tax program for the coming legislative period, which also has an impact on criminal tax law. The future traffic light government aims for fair national and international taxation. Fair taxes are the basis for the state’s ability to act, he said. This includes, in particular, the consistent prosecution and combating of tax evasion and tax avoidance. To achieve these goals, the new federal government is focusing primarily on organizational measures and digitization.

Organizational and personnel strengthening

In the Federal Ministry of Finance, strategic action against tax evasion is to be strengthened in terms of organization and personnel. However, there are also plans to increase staffing levels at Customs (keyword “moonlighting”), the Federal Central Tax Office, the Federal Financial Supervisory Authority and the Financial Intelligence Unit. It is to be expected that this will further strengthen the trend of consistent prosecution of tax offenses and the increase in criminal tax and fine proceedings.

Digitization

Tax auditing is to be modernized and accelerated, in particular through improved interfaces, standardization and the sensible use of new technologies. A new central organizational unit at the federal level, the Tax Research Institute, is to serve tax evaluation and provide an overview of lost tax revenues due to tax evasion and tax avoidance. This is intended to improve the basis for evidence-based legislation.

Combating tax evasion and tax avoidance

Germany is to play a pioneering role in the fight against tax evasion and aggressive tax avoidance. In the area of sales tax, which is particularly susceptible to fraud, a uniform nationwide reporting system is to be introduced as soon as possible, which will be used for the preparation, verification and forwarding of invoices. In addition, the German government intends to lobby at EU level for a definitive value-added tax system. This could come in the form of the reverse charge procedure, which in particular prevents tax fraud through sales tax carousels.

As soon as a breach of tax obligations occurs, the state intends to recover and collect tax damages suffered more consistently. Abusive dividend arbitrage transactions are to be prevented through new technical possibilities and the exchange of data between the financial supervisory authority and the tax authorities in cases of suspicion.

Lastly, tax crimes are to be combated not only at the national level, but also at the international level. In its coalition agreement, the government formulates the goal of global tax justice. In addition to the introduction of global minimum taxation, she wants to work to keep the EU list of tax havens constantly up to date. The already existing systems for the international exchange of financial account information CRS and FATCA are to be expanded. Previously possible acts of circumvention in this context are to be avoided in the future by implementing the corresponding OECD regulations.

Notification obligation for national tax arrangements

The notification obligation pursuant to Sections 138d et seq. of the German Fiscal Code (AO) has so far only applied to intermediaries in the case of cross-border tax arrangements. In the future, (potentially) aggressive tax planning should also be identified at an early stage in the case of national tax arrangements. To this end, the notification obligation for companies with a turnover of more than 10 million euros will be extended to national tax arrangements.

Corporate sanctions, compliance obligations and internal investigations

The issue of corporate sanctions remains on the political agenda even after the failure of the Association Sanctions Act. The rules on corporate sanctions, including the level of sanctions, are to be revised (i.e. “tightened”) to improve the legal certainty of companies with regard to compliance obligations and to create a precise legal framework for internal investigations. It remains to be seen whether this will result in a new law on sanctions for associations or whether the existing regulations will be amended in certain areas. In any case, it is clear that the tightening of corporate sanctioning regulations will have a significant impact on companies.

Conclusion

The thrust of the new traffic light government is clear and follows the trend of recent years: the consistent fight against tax avoidance and tax crimes. Even though these are only political declarations of intent so far, it is to be expected that they will also be implemented in the short term. For private individuals and companies, therefore, it will apply even more than before that tax misdemeanors can quickly lead to criminal tax or fine proceedings. Against this background, effective tax compliance is essential. Should a breach of tax obligations nevertheless occur, the internal clarification of tax law issues and the structuring of tax adjustments in the corporate context as a voluntary disclosure remain the means of choice.

Feel free to contact our experts in tax and white collar criminal law:

Dr. Heiko Hoffmann, Arndt Rodatz, Philipp Schiml, Jochen Maier, Günter Graeber, Sebastian Bothe, Christian Judis, Barnim von Gemmingen, Cristian Barbieri, Volodymyr Izrailevych, Katharina Beckmann.