Federal Finance Minister Lars Klingbeil (SPD) aims to take a harder stance against tax fraud. "I want self-disclosure to no longer automatically lead to exemption from punishment," the Vice Chancellor told newspapers of the Funke Media Group on Monday. "Criminals must no longer be able to buy their way out so easily. No one should speculate that they evade taxes and, when they fear being caught, simply file a self-disclosure and get off scot-free."
Tax evasion is punishable by a fine or imprisonment of up to five years. However, those who voluntarily correct incorrect information provided to the tax authorities can be exempted from punishment under certain conditions. According to the Federal Finance Ministry, as cited by the Funke newspapers, this exemption from punishment creates "wrong incentives." It leads and encourages people "to evade taxes and only declare them as part of a self-disclosure before the feared discovery."
The ministry will propose a legislative amendment according to which self-disclosure will in future only have a mitigating effect on punishment "above certain thresholds," but will no longer exempt from punishment. Klingbeil told the Funke newspapers: "We protect those who follow the rules. Honest people must not be the fools."
According to the report, the initiative is part of an action plan for better combating tax crime. This plan also envisages upgrading the special unit against tax evasion at the Federal Central Tax Office. Tax authority data will in future be stored centrally on a platform and analyzed using artificial intelligence (AI). Additionally, a whistleblower portal will be set up at the Federal Central Tax Office as a central point of contact.
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