It rarely begins dramatically: A letter from the german tax investigation office, an unannounced visit to the business premises, a phone call from the tax adviser who no longer wants to talk only about back payments – and suddenly it is no longer just money at stake, but the question of intent, imprisonment and seized assets. Anyone who, as an entrepreneur, member of a liberal profession or asset holder, finds themselves caught up in these proceedings experiences a rupture: the relationship between citizen and tax authority turns into a criminal case in which the investigators conduct their inquiries with the powers of the police.
As a german specialist lawyer for criminal law, I have for years been conducting the defence in tax criminal proceedings – from the search, through the asset seizure, to the main hearing and its economic consequences – and have in doing so regularly achieved for my clients discontinuations, terminations of proceedings and measured outcomes. At the same time, I am active as an author and have written, among other things, articles on confiscation in tax criminal proceedings and on the question of when the evaded tax can be skimmed off at all as “something obtained”. Further topics of my publications are criminal aiding and abetting through neutral, profession-typical activities of tax advisers and bookkeepers, as well as the liability of the tax adviser for a monetary condition paid in the course of a discontinuation under § 153a StPO (German Code of Criminal Procedure).
Protected interest
Tax evasion under § 370 AO protects, according to the prevailing view, the public interest in the full and timely collection of every individual type of tax, related to the respective assessment period. This protection reaches far: even tax claims that are linked to a norm later declared unconstitutional are covered, as long as the Federal Constitutional Court orders a temporary continued validity. The taxpayer therefore cannot “talk himself out of” criminal liability by speculating on the nullity of a norm – the authority to strike down a norm lies solely with the Federal Constitutional Court.
Systematically, § 370 AO is lex specialis in relation to the fraud offence of § 263 StGB and is a result offence: the act is only completed upon the tax shortfall, that is, when taxes are not assessed, not assessed in full, or not assessed in time. This distinction from fraud has lost practical significance since the Federal Court of Justice also brings fictitious tax debt relationships under § 370 AO – even where the alleged taxpayer does not exist at all and the entire process was invented solely to obtain unjustified refunds.
Central acts
The offence can be traced back to two basic constellations. In commission by active conduct, the offender makes incorrect or incomplete statements about facts relevant for taxation – for example, when in corporate income tax returns a tax deduction is certified whose factual prerequisites never existed. Alongside this stands the breach-of-duty leaving of the tax authorities in ignorance, that is, the simple failure to file returns such as the advance VAT return or annual VAT return.
The result of the offence, the amount of the evaded tax, can also be determined by way of estimation in the criminal proceedings, for instance via an internal business comparison combined with the guideline-figure collection. However, criminal-procedural standards under § 261 StPO apply here, not the more generous estimation rules of § 162 AO. The correct calculation of the shortfall amount is tricky: VAT must be extracted from the gross turnover and not added on top, and for wage tax what matters is the actually paid net wages. Such calculation errors are a classic point of attack for the defence, because they directly shift the damage relevant to sentencing.
Quantity question: minor and serious evasion
In tax criminal law, quantity makes the decisive difference. The particularly serious case under § 370 para. 3 AO raises the sentencing range to six months to ten years, thereby bringing tax evasion close to fraud. The statute works with standard examples – an elastic technique in which the presence of an example indicates the assumption of a serious case without prescribing it bindingly.
The practically most important standard example is evasion “on a large scale”. Here the case law of the Federal Court of Justice, in alignment with fraud, has established a fixed threshold of 50,000 euros per offence, which – as it is aptly put – has a guillotine character. A later reparation of the damage removes the classification as a serious case just as little as the question in which business environment the amount was reached. However, the indicative effect is reversible: back payments made partly before the offence was discovered can compensate for the threshold being exceeded within the required overall assessment, so that despite exceeding the 50,000 euros it can remain without consequences.
Beyond the amount, the statute recognises further named serious cases: the abuse of the office-holder position, the continued evasion using counterfeit or falsified documents, the gang-based evasion of turnover or excise taxes, as well as – as a reaction to the Panama Papers – the use of controlled third-country companies for concealment. Particularly with the document variant, the case law draws narrow boundaries: sham invoices that merely contain a written lie do not suffice, because counterfeiting and falsifying presuppose a deception about the recognisable issuer. In addition, the unnamed particularly serious case remains possible where, after an overall assessment, the wrong and the guilt of the act clearly stand out from the average – for example in the case of a series character, established concealment structures or systematic sham transactions.
Sentencing: the thresholds of the Federal Court of Justice
Beyond the question of the serious case, the Federal Court of Justice has developed clear points of orientation for the specific sentence based on the amount of the evaded sum. For six-figure shortfall amounts, a mere fine comes into consideration only where there are weighty mitigating factors. If the evasion reaches the million mark, a suspended, deferrable custodial sentence is only possible where there are particularly weighty mitigating factors. This line completely structures the defence in the higher damage range: where the damage is established, the focus shifts to working out and substantiating the mitigating factors.
An important differentiation concerns the participation of several persons. Whether a particularly serious case is present must be examined separately for each participant; it is a legal error to link, in the case of an accomplice, solely to the standard example realised by the principal offender. What is decisive is whether the act of assistance itself presents itself as particularly serious. At the same time, in principle anyone can be a perpetrator of tax evasion, not only the tax debtor – the tax obligation existing in the specific case is not a special personal characteristic within the meaning of § 28 StGB.
Limitation: a system of its own
Limitation follows its own, clearly tightened rules in tax criminal law. While simple tax evasion becomes time-barred in five years, the period in the cases of the particularly serious case is fifteen years. Added to this is a special rule on absolute limitation: in the cases of § 370 para. 3 sentence 2 nos. 1 to 6 AO, prosecution only becomes time-barred when two and a half times the statutory period has elapsed – that is, after 37.5 years, or, adding a suspension period, even after about 42.5 years.
In the literature, the pointed conclusion is drawn from this that serious tax evasion becomes practically incapable of limitation; there is talk of an “imbalance in the limitation system”. The question of a possible unconstitutionality of this extension has so far not been clarified by the courts. For practice this means above all that even long-past facts remain current – and that the tax investigation office may even investigate already time-barred periods where indications relevant to non-time-barred years can be expected from them.
The voluntary disclosure as a narrow gate
The voluntary disclosure under § 371 AO remains the way back to impunity, but has become a narrow gate through the reforms of recent years. The prerequisites include the complete correction as well as the timely back payment of the evaded taxes including interest. If the discloser is economically unable to make the back payment, this is to his detriment – he alone bears the risk of success, and he has no claim to the release of assets from a seizure ordered because of other offences.
For larger amounts, the refraining from prosecution under § 398a AO takes the place of complete impunity. Here the relevant threshold lies at 25,000 euros, above which a staggered percentage surcharge of up to twenty percent of the evaded amount must be paid. The provision now no longer covers only the perpetrator but also the participant in the offence, whereby only the person who has obtained an advantage from the offence is obliged to make the back payment.
The procedure: investigation, search, asset seizure
The tax criminal case first becomes tangible through its interventions. The tax investigation office possesses, in the tax criminal case, the same powers as the police; its officers are investigating persons of the public prosecutor’s office and, with the independent examination of papers, have a special right. In doing so, the investigation acts double-functionally – it investigates simultaneously in the assessment and in the criminal proceedings – which forces the defence to keep both procedural regimes in view from the outset, because it is possible to switch between them at any time.
Economically the most threatening is often not the punishment but the asset seizure under §§ 111e et seq. StPO. With it the state secures the later confiscation of the value of substitution, and indeed – this is decisive – in the entire, also legally acquired, assets of the accused. Required are a sufficient suspicion regarding an asset-related offence and a concrete need for security, that is, indications that the accused is attempting to thwart access. Since the seizure carries increasing weight in fundamental-rights terms with increasing duration, an application for revocation can, after about six months, regularly be based on the lack of proportionality of its continuation; moreover, the enforcement can be suspended by providing security.
Current lines of case law
The more recent jurisprudence tightens access to economic advantages in several places. For confiscation in the field of tobacco tax evasion the following applies: a skimmable advantage arises only insofar as the tax saving actually reflects itself in the offender’s assets, that is, where the offender has an economic possibility of access to the goods – anyone who produces only for unknown backers obtains nothing. At the same time, a double burden through skimming and taxation is avoided, for example via the gross principle and the possibility of correcting an unjustified tax statement under § 14c UStG.
Beyond tax criminal law in the narrower sense, the case law on economic criminal law of the years 2024 and 2025 shows a consistently strict, formally oriented determination of damage. In billing fraud the “strictly formal approach” applies: anyone who deceives about the prerequisites of a remuneration claim has the entire paid amount attributed to him as damage, without the value of services actually rendered being set off – whereby cleanly separable, proper services are spared this “contamination”. A comparable strictness shows itself in subsidy fraud, where the entire subsidy amount counts as damage when the subsidised service was already, in principle, not eligible for funding. This tendency is significant for tax criminal law practice because it radiates onto the calculation of damage in related property offences and forces the defence to work out the separability of proper from objected-to processes at an early stage.
Practical consequences for those affected
From all this follows a clear defence logic. In the lower and middle damage range, the exact calculation of the shortfall amount and the question whether the 50,000-euro threshold is genuinely exceeded or can be compensated by partial payments are decisive. In the higher range, the weight shifts to sentencing and the early substantiation of weighty mitigating factors, because the thresholds of the Federal Court of Justice strongly limit the leeway for fines and suspended sentences. In parallel, asset security must be kept in view from the outset – both with regard to the defence against a seizure and to a possible voluntary disclosure, the success of which presupposes economic capacity.
Criminal liability relating to taxes is, in the year 2026, characterised by a double movement: in substantive terms the case law has continuously expanded the scope of application of § 370 AO and access to economic advantages, while the limitation and skimming rules give the state an extraordinarily long breath. Anyone who finds themselves in such proceedings should therefore not wait, but set the decisive points – damage calculation, voluntary disclosure, asset security – as early as possible.
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Our law firm specializes in criminal defense, cybercrime, commercial criminal law including criminal tax law as well as IT law and manager liability. We only take on criminal defense cases for consumers—we are based in the Aachen area and operate nationwide.