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

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.

More NEWS articles on this:

Will Turkey become the new Switzerland?

Data exchange with Turkey: voluntary disclosure protects against prosecution

Surprise mail from the tax office – where did they get the information about my foreign account?