Fight against time: Last chance to avoid prosecution in Germany by filing a voluntary declaration

Now the time has come. The final step on the part of Turkey has been taken. The agreement on the automatic exchange of information (AEOI), which Turkey ratified back in 2017, will now actually be implemented. The Turkish President, Recep Tayyip Erdogan, personally ordered the execution of the relevant decision by decree on May 31, 2021. The presidential decree was published in the Official Gazette with the number 31498. This regulation came into force on June 1, 2021.

Especially for the 6 to 7 million Turks living in Germany, this event may have devastating consequences:

What does this mean in concrete terms for all those living in Germany who have, for example, an account, custody account or real estate in Turkey?

INSIDER online event on June 17, 2021 on the topic.

Over 100 countries participate in the automatic exchange of information, including Germany, Belgium, France, Switzerland, Netherlands, Austria, England, USA, Canada, Sweden, Norway, Denmark and Australia, etc. (Detailed country list)

What does this mean in concrete terms for all persons living in Germany who have, for example, an account, custody account or real estate in Turkey?

All banking information of persons residing in Germany will first be transferred by banks and other financial institutions in Turkey to the Turkish tax authorities in Ankara, which will then forward this data to the Federal Central Tax Office in Bonn.

What are the consequences?

According to German tax law, anyone who has a residence or habitual abode in Germany is subject to unlimited tax liability in Germany. This means that all domestic and foreign income is taxable in Germany.
Many potentially affected persons live in Germany.

If they hold a bank account in Turkey, for example, the investment income earned from it is regularly taxed in Turkey. This fact causes confusion and leads to the belief that a (renewed) taxation of this income in Germany or its declaration in the context of the tax return in Germany is no longer necessary. However, this is not the case.

Even if it seems unfair at first and double taxation cannot be ruled out, all income must be declared to the German tax office in the first step, which then (in the second step) takes into account the taxes already paid abroad.

Consequently, all persons who have or had income and bank accounts in Turkey and have not declared them in Germany are now threatened with discovery by the tax office.

How will the German tax offices react to this?

As part of the exchange of information, the German tax offices will be provided with very detailed information on account holders and account movements. Subsequently, the responsible German tax offices will write to the persons concerned. The taxpayers will be asked to make a statement regarding their income from abroad.

Is it still possible to file an exempting voluntary declaration?

As soon as the criminal act is discovered, the voluntary disclosure loses its penalty-exempt effect. It is unclear whether the automatic report from Turkey already leads directly to the discovery of the crime.

It remains to be seen how the tax offices will deal with this. At the latest, however, when one receives the mail from the tax office, it becomes tight with the effective self-disclosure. It is risky to do something “at the last minute” only after the tax office has asked you to do so.

What are the recommendations for action?

We recommend that all those who have earned income in Turkey and have so far withheld it from the German tax authorities take immediate action! It should be checked whether a voluntary declaration is necessary and expedient. If it is prepared professionally and submitted to the competent tax office, a criminal conviction can still be prevented.

For whom is it relevant?

In principle, anyone who has not declared income from Turkey in Germany is affected. However, there are special groups that will be hit hard by a possible conviction for tax evasion.

If someone is sentenced to more than 90 daily sentences for a criminal offense, an entry is made in the Federal Central Register (BZR); one is then also considered to have a criminal record.
In addition, other authorities can inspect the Federal Central Register, which is relevant, for example, when applying for naturalization.

Furthermore, the entry will be reflected in the certificate of good conduct. This means: all professions for which a certificate of good conduct is relevant or a license is required may no longer be able to be practiced. This also affects tradespeople, because with the conviction they will be considered unreliable in the sense of the Trade Regulation Act.

Recipients of social benefits in Germany, who had undeclared income in Turkey, face the additional risk of having to repay the benefits received and, in this respect, also criminal proceedings.

There is a need to act quickly in order to be faster than the tax office and to be on the safe side with an effective and thus penalty-free voluntary disclosure.

Time schedule for implementation of the Common Reporting Standard

According to the OECD list, Status of Commitments,
Stand: 17.02.2021 the exchange of information takes place for the following countries:

Anguilla, Argentina, Belgium, Bermuda, British Virgin Islands, Bulgaria, Cayman Islands, Colombia, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Faroe Islands, Finland, France, Germany, Gibraltar, Greece, Guernsey, Hungary, Iceland, India, Ireland, Isle of Man, Italy, Jersey, Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mexico, Montserrat, Netherlands, Norway, Poland, Portugal, Romania, San Marino, Seychelles, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Turks and Caicos Islands, United Kingdom, Andorra, Antigua and Barbuda, Aruba, Australia, Austria, Azerbaijan, Bahamas, Bahrain, Barbados, Belize, Brazil, Brunei Darussalam, Canada, Chile, China, Cook Islands, Costa Rica, Curaçao, Dominica, Greenland, Grenada, Hong Kong (China), Indonesia, Israel, Japan, Lebanon, Macao (China), Malaysia, Marshall Islands, Mauritius, Monaco, Nauru, New Zealand, Niue, Pakistan, Panama, Qatar, Russia, St. Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, Saudi Arabia, Singapore, Sint Maarten, Switzerland, Trinidad and Tobago, Turkey, United Arab Emirates, Uruguay, Vanuatu, Ghana, Kuwait, Kazakhstan, Nigeria, Oman, Peru


Bundeszentralamt für Steuern,
Aktuelle Liste der teilnehmenden Staaten
Stand: 1. Juli 2020

Data exchange with Turkey?
Our expert advises:

Rechtsanwalt
Fachanwalt für Steuerrecht
Geschäftsführer der ACCONSIS

Dr. Christopher Arendt

Selbstanzeigen
Steuerstrafverfahren
Internationales Steuerrecht

Service-Phone
+ 49 89 547143
or by e-mail c.arendt@acconsis.de

My recommendation?

An effective voluntary declaration to the tax office leads to an obstacle to prosecution, i.e. one can no longer be punished for the tax evasion in question.

However, whether a voluntary declaration is possible must be examined in detail in each individual case in view of the complex legal requirements.

Please do not hesitate to contact me.
I will be happy to assist you in an advisory capacity.

Interview with Dr. Christopher Arendt


Just in:
Datenaustausch mit der Türkei | Steuern im Ausland | Automatischer Informationsaustausch (AIA) von Kontodaten & Bankdaten | Selbstanzeige

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