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Criminal Defense

BFH ruling on international account information

In a recent ruling dated January 23, 2024 (IX R 36/21), the German Federal Fiscal Court (BFH) ruled on the constitutionality of the automatic exchange of financial account information and its compatibility with fundamental rights. This issue has far-reaching implications for taxpayers with accounts abroad.

Facts of the case

In this case, the taxpayers took legal action against the transfer of their account balances, which were passed on by Swiss authorities to the Federal Central Tax Office (BZSt). The plaintiffs demanded the deletion of this data and argued that their fundamental rights, in particular the right to informational self-determination, had been violated.

Decision of the BFH

  1. Constitutionality confirmed: The BFH confirmed the constitutionality of the automatic exchange of financial account information in accordance with Section 5 (3) of the Financial Account Information Exchange Act.
  2. No violation of fundamental rights: The exchange does not violate the right to informational self-determination of those affected. The exchange serves to combat cross-border tax evasion and promotes tax honesty.
  3. No disproportionate impairment: The BFH did not consider the transfer of account balances to be a disproportionate impairment of the rights of the plaintiffs. In addition, the technical and legal protective measures were sufficient to minimize the risk of data breaches.

Consequences for taxpayers

This ruling confirms the obligation to disclose account information in international situations and underlines the obligation of taxpayers to be transparent. It shows that protection against tax evasion is a legitimate interest that outweighs the fundamental rights of those affected in this context:

Contrary to the view of the plaintiffs, the admissibility of the automatic exchange of financial account information in view of the case law of the Federal Constitutional Court on dragnet searches (decision of the Federal Constitutional Court of April 4, 2006 – 1 BvR 518/02, BVerfGE 115, 320) does not require that this may only take place in the event of a specific risk.

In the case to be decided at the time, the BVerfG saw the necessity of a concrete danger, as otherwise there would not be sufficient evidence for the teleological determination of the collectable data (…)

It is true that the transmission of the account balances – as explained above – affects the plaintiffs’ right to informational self-determination. In the opinion of the Senate, however, the interference threshold is low.

Recommendations

  1. Information and transparency: Taxpayers with international accounts should be aware of their disclosure obligations.
  2. Compliance with tax regulations: This ruling emphasizes the importance of compliance with national and international tax regulations.
  3. Legal advice: In the event of uncertainties, those affected should contact a tax consultant or lawyer.

The BFH’s ruling clarifies the balance between the need for tax transparency and the protection of personal data in the context of the international exchange of account information.

German Lawyer at Law Firm Ferner Alsdorf
I am a specialist lawyer for criminal law + specialist lawyer for IT law and dedicate myself professionally entirely to criminal defence and IT law, especially software law. Before becoming a lawyer, I was a software developer. I am an author in a renowned commentary on the German Code of Criminal Procedure (StPO) as well as in professional journals.

Our law firm specialises in criminal defence, white-collar crime and IT law / technology law. Note our activity in digital evidence in IT security and software law.
German Lawyer Jens Ferner (Criminal Defense & IT-Law)