Tax Criminal Law

1What is it about?

Tax evasion is a criminal offence where someone provides the tax authorities with incorrect or incomplete information on facts relevant to tax, or in breach of duty provides no information, and thereby reduces tax revenue (§ 370 AO). The penalty is up to five years’ imprisonment or a fine; in particularly serious cases, from six months up to ten years.

Tax criminal proceedings are conducted by the criminal and administrative offences unit of the tax office (Straf- und Bußgeldsachenstelle) or by the tax investigation authority (Steuerfahndung) and often run in parallel with the tax assessment proceedings. In addition to the penalty, the tax must be paid retrospectively and interest on evaded tax accrues.

2Typical case scenarios

• Undeclared income, for instance from investment assets, rental or self-employment.
• Undeclared assets abroad, in particular accounts in Switzerland.
• VAT evasion, undeclared work, sham invoices.
• A tax audit that develops into tax criminal proceedings.
• A search by the tax investigation authority.
• Uncertainty as to whether an effective voluntary disclosure is still possible.

3Frequently asked questions

4How the proceedings unfold

1. Grounds for suspicionNotification of audit findings, tax audit, analysis of data or a tip-off.
2. InitiationInitiation of criminal proceedings and notification to the person concerned, possibly a search.
3. Investigation and calculationDetermination of the amount of tax evaded, estimates, statement by the defence.
4. ConclusionDiscontinuation, discontinuation subject to conditions, penal order (Strafbefehl) or indictment.

5What requires particular attention

• Do not submit a voluntary disclosure on your own without expert advice. Incomplete disclosures do not exempt you from punishment.
• Note the blocking effect: once an audit order has been announced or proceedings have been initiated, voluntary disclosure is excluded.
• Expect to pay the tax retrospectively, with interest on evaded tax, regardless of the outcome of the criminal proceedings.
• The limitation period in tax criminal law is long; check it in each individual case.

6How we defend you

We first examine whether and how an effective voluntary disclosure is possible, and prepare it carefully together with you and, where appropriate, your tax adviser. If proceedings have already been initiated, we take on the defence against the tax investigation authority and the criminal and administrative offences unit.

We review estimates, calculations and allegations of intent, negotiate a discontinuation under §§ 153, 153a StPO or a waiver of prosecution under § 398a AO, and represent you in court where necessary. Cross-border matters, in particular involving Switzerland, are part of our practice.