Tax evaders dash to beat prosecution clock

Hannah Cleaver
Hannah Cleaver - [email protected] • 5 Feb, 2014 Updated Wed 5 Feb 2014 14:41 CEST
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It is starting to look like to be someone in Germany you have to pay back taxes on money that has been stashed away in a tax haven. The spate of apologies is being prompted by a race-against-time clause, a law professor told The Local.

Bayern Munich president Uli Hoeneß made a major splash last year when he submitted a Selbstanzeige - a voluntary confession - to his local tax office.

But the authorities are not satisfied, and will prosecute him for seven years' worth of alleged tax evasion in a trial due to start in March.

He may simply have been too slow - time is of the essence when deciding to come clean about missed tax payments.

Crucial to get in first

Law professor Markus Heintzen at Berlin's Free University told The Local there was a clause in the law which meant people could avoid prosecution if they owned up before officials found their data.

"You have to imagine: you're a tax evader and you get a call from your bank saying the tax investigators are in the building and looking at things," he said.

"It then becomes a race against time to contact your local tax office and confess.

"It is crucial for the tax evader to contact the tax office before the investigators identify them - otherwise they can face prosecution.”

The pressure is being ramped up by attempts over the last few years by the Germans to persuade the Swiss authorities to agree to swap financial information. This has repeatedly failed on the back of opposition from the Social Democrats (SPD) who insist the proposals do not go far enough.

But these attempts, which many feel will at some point succeed, have been accompanied by the purchase of stolen bank data by German officials from the Swiss.

These “tax CDs” are full of names and numbers which expose tax evasion scams by the rich - and in some cases the famous.

The fear of being found out before being able to confess and thus avoid prosecution is pushing people into the arms of the tax man, even once the fine is paid, they should also, said Heintzen, expect their tax returns to be very thoroughly checked in the future.

Careful with future tax returns

Those who will have to be very careful when next submitting their tax forms include Germany's feminist icon Alice Schwarzer. She owned up this week to having “made a mistake” in hiving money away in a Swiss bank account - and stumped up €200,000 in back payments, plus default interest.

She was swiftly followed into the tax evasion spotlight by Helmut Linssen, treasurer of Angela Merkel's party, the Christian Democratic Union (CDU) and for five years state Finance Minister for North-Rhine Westphalia.

He was accused of having stashed nearly a million Deutschmarks in an off-shore bank account. A report in Stern magazine said the money was then for years shuffled between trusts in the Bahamas and in Panama. Linssen denies tax evasion.

This row was then overshadowed this week by the resignation of André Schmitz from his job as Social Democrat Berlin state senator for culture. He was forced to admit he had not paid tax on €425,000 in a Swiss bank account.

Other major names include film producer Artur Brauner, who denies accusations he hid a million euros in a Swiss bank.

Theo Sommer, publisher and former editor of Die Zeit newspaper was convicted of tax evasion and fraud last month for failing to pay tax on €650,000.

READ MORE: The ten richest Germans



Hannah Cleaver 2014/02/05 14:41

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