Germany tweaks anti-money laundering & tax laws

The German Finance Ministry released new rules which further strengthen the existing anti-money laundering law on voluntary disclosure. The Federal Council also approved the draft bill on combat of tax evasion.

Important amendments to the current rules include:

• Exemption from punishment is limited to an amount of evaded tax of EUR 50,000 and supplementary payment for the evaded tax in due time is obligatory;
• If the amount of evaded tax exceeds EUR 50,000, exemption from punishment shall be possible only if a voluntary payment of 5% of the evaded tax is paid.(in addition to the repayment of evaded taxes and interest).

The time period for submitting voluntary disclosures is also to be amended under the new rules. According to the current laws, individuals can avoid prosecution if their voluntary disclosure is submitted to the German tax authorities at the start of an investigation. However, in future immunity will be granted only if individuals make a voluntary disclosure before the authorities issue a written notice.

The draft bill to combat tax evasion is now designed to limit the amount in excess of which, voluntary disclosure no longer grants automatic immunity. According to the Finance Ministry, this is result of the significant number of voluntary declarations that were made following the recent tax data revelations.

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