On the 10th of each month or quarter, self-employed persons and tradespeople must report their turnover and wage tax returns to the tax office. Self-employed persons and tradespeople should note this date even more clearly in their calendars than before. Entrepreneurs who do not submit their regular tax returns, e.g. for turnover tax or wage tax, on time now face direct tax penalty proceedings according to a new administrative guideline.
According to a new administrative guideline for the tax offices (AStBV, here no. 132 para. 1 - Instructions for Criminal and Penalty Proceedings 2012), in future, in the case of late returns, these are to be forwarded directly to the offices for fines and criminal matters. This means that many taxpayers are now threatened with a considerable escalation of the tax procedure. It is true that, according to general opinion, a delayed submission of a tax return also constituted "tax evasion for a period of time" up to now, provided that the taxpayer intentionally delayed payment by submitting the tax return after the deadline. In many cases, however, the late submission of the return is based on other reasons, such as illness or missing documents.
For this reason, an earlier version of the aforementioned instruction (AStBV 2009) also explicitly waived the automatic involvement of the penalty and fine office if tax returns were not received by the tax office in time. So far, delays have also been handled relatively unbureaucratically by the tax offices. If the required declarations were submitted late, the tax office demanded a late payment surcharge of a maximum of ten percent of the outstanding amount and that was the end of the matter.
Now, however, according to the new directive, if the declaration is submitted late, the tax investigation will be called in directly and immediately. Therefore, entrepreneurs should pay even more attention than before to submit the required declarations to the tax authorities in due time.
Source: Press release of the German Tax Consultants Association e.V.
Goldberg Attorneys at Law 2012
Attorney at Law Michael Ullrich, LL.M. (Information Law)
Specialist attorney for information technology law (IT law)