On the 10th of each month or quarter, self-employed individuals and businesses are required to submit their VAT and wage tax returns to the tax authorities. This deadline should be noted by self-employed individuals and businesses even more prominently than before. According to a new administrative directive, businesses that fail to submit their regular tax declarations, such as for VAT or wage tax, on time now face direct tax criminal proceedings.
Under a new administrative directive for tax authorities (AStBV, specifically No. 132 Para. 1 – Instructions for Criminal and Fine Proceedings 2012), delayed declarations are now to be directly forwarded to the fine and criminal prosecution departments. This represents a significant escalation of tax proceedings for many taxpayers. While a delayed submission of a tax declaration was previously generally considered 'temporary tax evasion' if the taxpayer intentionally delayed payment by submitting the declaration after the deadline, in many cases, however, the delayed submission of the declaration is due to other reasons, such as illness or missing documents.
For this reason, an earlier version of the aforementioned directive (AStBV 2009) explicitly waived the automatic involvement of the criminal and fine department if tax declarations were not submitted to the tax office on time. Previously, delays were handled relatively unbureaucratically by the tax authorities. In cases of delayed submission of the required declarations, the tax office would impose a late payment surcharge of up to ten percent of the outstanding amount, and the matter was thus resolved.
However, under the new directive, a delayed submission of a declaration now directly and immediately triggers a tax investigation. Therefore, entrepreneurs should be even more diligent than before in submitting the required declarations to the tax authorities on time.
Source: Press release of the German Association of Tax Advisors e.V.
Goldberg Attorneys at Law 2012
Attorney at Law Michael Ullrich, LL.M. (Information Law)
Specialist attorney for information technology law (IT law)
E-mail: info@goldberg.de
