Corporate criminal tax law is mainly characterized by the fact that unpaid amounts may be punishable by huge fines, which poses a particular challenge to the defense. Since tax evasion can be committed for “oneself or another”, business owners, managing directors, and board members are exposed to the danger of being considered perpetrators. If the taxes that have been evaded exceed the amount of one million euros or more, there is a danger that these persons will be taken into custody. The defense must then be communicated via the confinement facility, which puts a substantial burden on the proceedings.
Criminal tax law advice for businesses: seizure of corporate bank accounts
Furthermore, it is quite common for the Public Prosecutor’s Office to recover any alleged tax liabilities immediately by way of seizure of corporate bank accounts. The seizure applies to the entire account if it has sufficient funds. To remedy this situation, the alleged tax liabilities can be deposited at a Local Court (Amtsgericht). In criminal tax law cases, this can be a lengthy process, which creates another problem for the businesses, namely, whether to file for bankruptcy due to lack of financial means.
Voluntary disclosure and penal surcharge – criminal tax law for businesses
Criminal tax law provides that immunity from prosecution can be obtained by filing a voluntary disclosure. However, if the evaded taxes exceed the amount of 25,000 euros for each offense, you will only be spared from being prosecuted if you pay a penal surcharge in addition to the taxes and interests. The penal surcharge is staggered and is payable once by every perpetrator.
It is staggered as follows:
- 10% of the evaded tax if the amount evaded does not exceed 100,000 euros.
- 15% of the evaded tax where the amount evaded exceeds 100,000 euros but does not exceed 1,000,000 euros.
- 20% of the evaded tax where the amount evaded exceeds 1,000,000 euros.
Regulatory fines under criminal tax law
Regulatory fines affect the business as a legal entity if the bodies of the legal entity have committed criminal or regulatory offenses during the course of their activities. For that to be the case, it is sufficient if, for example, the business owner fails to perform his supervisory measures, which lead to employees committing criminal or regulatory offenses. The failure to take such supervisory measures can be treated as a regulatory offence under Criminal tax law.
Criminal tax law advice for businesses: preventive measures
Preventive measures include, above all, control of existing operating procedures according to criminal tax law. In many cases, people are not aware that they are violating the law, or at least, they are not violating it intentionally. Early detection of errors in the operational procedures makes it easier to defend against the allegation of tax evasion and considerably shortens the duration of the proceedings. An internal review can furthermore be used to demonstrate to the authorities that criminal tax law violations did not occur systematically or intentionally in the business. The team at LSV Rechtsanwalts GmbH will advise you on all questions pertaining to criminal tax law, including client mentoring and compliance in the business. Take advantage of our many years of experience and competence in matters relating to criminal tax law for companies.
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