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German Bill Toughens Law On Voluntary Disclosures

by Ulrika Lomas,, Brussels

16 December 2010

The German Finance Ministry has announced details of a draft new law designed to assist the fight against tax evasion and money laundering by toughening existing rules on voluntary disclosure.

According to the finance ministry’s statement, in future impunity from prosecution will only be granted provided that information on all assets qualifying for tax is “completely and accurately” given during the voluntary disclosure. As a result, individuals providing only “piecemeal” information will not be granted immunity.

The timeframe for submitting voluntary disclosures is also to be amended under the new rules, the ministry points out. Currently, individuals will still avoid prosecution if their voluntary disclosure is submitted to the German tax authorities at the beginning of an investigation. In future, individuals will only be granted immunity if the voluntary disclosure is submitted prior to the issue of a written notice.

Until the new regulations are in force, individuals who have only partially disclosed details of their undeclared assets will still avoid prosecution. However, following entry into force of the provisions, individuals will be required to declare any undeclared assets.

In addition to the latest changes to Germany’s criminal tax law, the ministry has also announced changes to the offence of money laundering in the penal code, in a bid to strengthen Germany as an economic location and to offer more effective protection against money laundering and the financing of terrorism.

Consequently, in accordance with the Financial Action Task Force On Money Laundering’s international standards, market manipulation, insider trading, and piracy are all considered predicates of money laundering.

TAGS: individuals | money-laundering | compliance | tax | tax compliance | law | enforcement | Germany | standards | regulation

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