BGH: Advance VAT returns and annual returns are different procedural acts

With its decision of December 10, 2025(1 StR 387/25), the Federal Court of Justice changed course: advance VAT returns and annual VAT returns for a tax period are different procedural acts.

In practice, the decision results in particular in an increased risk of prosecution for the taxpayer or the person responsible for the taxpayer, as – contrary to previous case law – in the event that the incorrect annual return cannot be prosecuted, the prosecution of the incorrect advance returns is “revived”.

The already existing high requirements for the design of effective voluntary disclosures remain in place. The decision of the BGH does not change this. However, in the area of VAT in particular, the manner in which the correction of advance VAT returns and annual VAT returns is to be carried out in the context of voluntary disclosures must be carefully examined.

Previous case law of the BGH: A procedural act

Up to now, the Federal Court of Justice (BGH) was of the opinion that incorrect advance tax returns for one year and the subsequent annual declaration constitute a single procedural offense pursuant to § 264 StPO (BGH, decision of November 24, 2004 – 5 StR 206/04).

Advance returns and annual returns for one year are 13 different substantive offenses. These are related to each other in the relationship of multiplicity of acts, as the respective acts have an independent explanatory value and also an independent unlawful content, irrespective of their interlocking under tax law. If several independent acts constitute a multiplicity of acts, they generally also constitute several procedural acts within the meaning of Section 264 StPO.

Nevertheless, the 5th Criminal Senate considered the advance returns and the annual return to be a single procedural offense. Due to the close interlocking of the substantive VAT law, the advance returns and the annual return of a year were so interconnected under criminal law that the wrongful and culpable content could only be correctly assessed in their overall view. A separate assessment would have artificially split up the uniform facts of life characterized by the annual tax structure, since both types of declaration concern the same type of tax, the same period and the same parties.

Change of course by the BGH: Different procedural acts

The BGH has now expressly abandoned this case law:

Incorrect, incomplete or omitted advance tax returns and incorrect, incomplete or omitted annual returns relating to the same tax period constitute different procedural offenses within the meaning of Section 264 (1) StPO.

The 1st Criminal Senate of the BGH justified this in particular with the following:

• The close dovetailing required under substantive tax law does not exist, as these are two independent assessment procedures under tax law.
• Even in the case of several procedural offenses, the annual declaration can still be considered a voluntary disclosure. The wrongfulness of the incorrect VAT returns is therefore not overstated to the detriment of the defendant.
• There is also no risk of multiple convictions for the same criminal offense. This is because the submission of incorrect advance tax returns regularly constitutes predicate offenses that are also punishable.
• It is harmless that the temporary tax evasion relating to the advance returns only ends with the submission of an incorrect annual return and becomes permanent tax evasion.

Practical implications of the amended case law for those responsible in companies

The decision leads to an increased risk of prosecution for those responsible in companies. It has no impact on the structure of voluntary disclosures.

Increased risk of persecution

The new BGH case law leads to extended possibilities for criminal prosecution.

A distinction must be made between the offense in the substantive sense and the offense in the procedural sense: The submission of incorrect advance tax returns and an incorrect annual return are still up to 13 independent substantive offenses that could become part of criminal proceedings. While the offense in the substantive sense is particularly relevant for the criminal liability of a conduct, its concurrence and the sentencing, the offense in the procedural sense is of central importance for determining the legal effect and the expiry of the criminal action of a court decision.

Inaccurate advance returns and an inaccurate annual return for one year are no longer treated as a single matter at the procedural level, but can each be prosecuted and punished as separate (procedural) acts of tax evasion. This increases the risk of prosecution for the taxpayer: If, according to previous case law, proceedings relating to the annual return could not be adjudicated for legal reasons (e.g. due to the statute of limitations, discontinuation of proceedings for reasons of opportunity), according to previous case law this covered the prosecution of the entire procedural offense, i.e. also the incorrect advance returns for that year. As there are now several procedural acts involved, in the event of non-prosecution of the incorrect annual declaration, the prosecution of the incorrect previous declarations is revived.

Prior notification still a punishable predicate offense

However, the Federal Court of Justice also clarifies in the ruling that in cases of identical wrongdoing, punishment can still only be imposed once. This is because the Federal Court of Justice continues to uphold the view under substantive law that tax evasion by submitting incorrect advance returns can be co-punishable predicate offenses to a subsequent tax evasion by merely repeating an incorrect annual return. A co-punished predicate offense cannot be punished separately as long as the prosecution of the main offense is possible. In this case, the incorrect prior declarations are consumed by the incorrect annual return. This means that, as was previously the case under substantive law, a cumulative conviction of prior declarations and the annual declaration is not possible, and the new case law will not change this.

Structure of voluntary disclosures – connecting factor material offense

The decision of the Federal Court of Justice emphasizes: The preliminary declarations are not a mere “preliminary stage” to the annual declaration or a “uniform” process with the annual declaration, but independent declaration processes, each of which – as before – has its own unlawful content. However, the decision does not result in any changes with regard to the content and scope of an effective voluntary disclosure. Self-disclosure is a personal ground for annulment as an institution of substantive law. According to Section 371 of the German Fiscal Code (AO), the substantive offense, not the procedural offense, is the connecting factor for the question of the corrective link. The content of a voluntary disclosure therefore continues to be the 13 material acts within an assessment period.

Practical recommendation

As part of the voluntary disclosure, all advance returns and the annual return must therefore continue to be corrected. However, the BGH emphasizes that the submission of a correct annual return or correction of an annual return can still constitute a voluntary disclosure exempting the taxpayer from prosecution with regard to incorrect advance returns. The breakdown of turnover according to the period of the advance return in the context of a voluntary disclosure therefore remains dispensable after the end of the assessment period, as this would constitute a mere forgery (BGH, decision of October 13, 1998 – 5 StR 392/98). An abandonment of this case law cannot be inferred from the current decision.

Irrespective of this, it is still recommended in practice that, as long as the annual return for the relevant assessment period has not yet been submitted, all advance returns should be corrected individually and not by way of the annual return. On the one hand, this enables multiple corrections (Section 371 (2a) AO) and, on the other hand, payments in accordance with Section 398a AO can be avoided if the view is followed that these can be assessed in the event of a correction by way of the annual return.

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