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Tax Disclosure Surge Continues In Germany In 2013

by Ulrika Lomas, Tax-News.com, Brussels

01 August 2013


Chairman of the German tax union DSTG Thomas Eigenthaler has forecast that the number of voluntary tax declarations, submitted by German taxpayers wishing to regularize their hitherto unreported income, will soar to around 15,000 by the end of the year.

Given that 10,000 declarations were filed last year, the estimated figure for this year would mark a year-on-year increase of 50 percent, Eigenthaler explained in an interview with Bild. Eigenthaler noted that the German tax authorities could therefore anticipate additional revenues, arising from the disclosures, of between EUR500m (USD663m) and EUR600m in 2013.

One reason for the record number of disclosures this year is Bayern Munich football club chairman Uli Hoeneß's decision to submit a voluntary declaration to the German tax authorities back in April, regarding an undeclared Swiss account, Eigenthaler maintained. Furthermore, the failure of the Swiss-German withholding tax accord in the German Bundesrat, or upper house of parliament, also prompted a surge in declarations, Eigenthaler said.

Alluding to the tax deal brokered with Switzerland, the DSTG chairman stressed that if the bilateral agreement had not been blocked by lawmakers, many Germans with undeclared and untaxed assets held in the Confederation would have been able to regularize their accounts anonymously, by paying a one-off flat rate of tax of between 21 percent and 41 percent.

Instead, Germany's federal states have reasserted their commitment to purchasing stolen tax information, to track down German taxpayers alleged to have evaded their domestic tax obligations, further driving up the number of disclosures, Eigenthaler pointed out.

Renowned for its controversial and overzealous tax disc purchases, the German state of North Rhine-Westphalia last month reported that the number of taxpayers opting to regularize their tax situation in the first half of 2013 was more than four times the number of voluntary declarations filed in the whole of 2012.

TAGS: compliance | tax | tax compliance | tax avoidance | law | agreements | tax rates | withholding tax | Germany | Switzerland | individual income tax

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