Taxes: How the state wants to crack down harder on tax cheats

The German government is set to implement a more stringent approach to combatting tax and financial crime, aiming to increase pressure on offenders. Finance Minister Lars Klingbeil stated in Berlin that "the honest people in our society must not be the losers" and that "the few who cheat harm everyone who honestly pays their taxes."

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The honest people in our society must not be the losers. The few who cheat harm everyone who honestly pays their taxes.

Alongside Justice Minister Stefanie Hubig, Klingbeil unveiled an action plan comprising 26 measures. These include proposals for tougher penalties, a mandatory cash register system, and enhanced coordination among investigative bodies. Hubig emphasized that "our rule of law thrives on the trust citizens place in it" and that "citizens must be able to rely on rules applying to everyone. Tax crime undermines precisely this trust."

A key initiative is the establishment of a "Joint Center against Tax and Financial Crime" within the customs administration, drawing inspiration from the existing Joint Counter-Terrorism Center. This new body will centralize analysis, investigation, and prosecution of money laundering and tax-related offenses, fostering closer collaboration between state tax investigators and federal customs investigators. Artificial intelligence will also be leveraged for data analysis.

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Our rule of law thrives on the trust citizens place in it. Citizens must be able to rely on rules applying to everyone. Tax crime undermines precisely this trust.

The plan also proposes stricter penalties, moving away from the general impunity offered by voluntary disclosure. "Criminals should no longer be able to buy themselves off so easily," Klingbeil remarked. Penalties for organized tax crime gangs could increase from 10 to 15 years imprisonment. Furthermore, a felony offense category with a minimum one-year prison sentence is to be reintroduced for severe forms of tax crime, as stated by Hubig, which would place greater obligations on prosecutors.

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Criminals should no longer be able to buy themselves off so easily.

Additionally, the government aims to bolster instruments for confiscating assets acquired through illicit means. Klingbeil quipped, "The Porsche and the Rolex will be gone for now, and that will really hurt perpetrators." Customs' powers will be expanded, allowing for the seizure of assets for up to 180 days. Individuals whose assets are seized would then need to prove legal acquisition, shifting the burden of proof.

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The Porsche and the Rolex will be gone for now, and that will really hurt perpetrators.