Tax Evasion Defence Lawyer in Germany – English-Speaking Specialists in Frankfurt

Our law firm in Frankfurt am Main is specialised in tax evasion, tax fraud and other white-collar offences, including breach of trust, corporate crime and document forgery. With more than 25 years of experience in criminal defence, we represent private individuals, executives and companies in tax investigations and criminal proceedings throughout Germany.

Typical allegations in German tax crime or what to do after a search or tax investigation?

Tax evasion (Steuerhinterziehung) is the core offence of German tax criminal law. Under § 370 (1) nos. 1–2 AO, a person is liable if they (i) provide false or incomplete information to the tax authorities about tax-relevant facts or (ii) unlawfully omit such information, thereby causing a tax shortfall or an unjustified tax benefit. For defence in practice, see our tax evasion defence page and the overview of German criminal procedure.

Key Points for Defence and Assessment

Blanket offence: The AO refers to the German Criminal Code and special tax statutes—interpretation follows criminal-law principles (see criminal offences & criminal procedure).
No simple offsetting: The “Kompensationsverbot” (§ 370 (4) sent. 3 AO) limits set-offs; a criminal tax shortfall may exist even if no additional tax is ultimately assessed.
In dubio pro reo: A tax increase in the audit does not automatically prove a criminal tax loss.

Who Investigates? Roles, Competence and Procedure (§§ 386–388 AO)

BuStra (Fiscal Offence and Fines Unit): conducts most investigations and exercises powers akin to a public prosecutor (§ 386 (1) AO).
Subject-matter competence: the tax office competent for the tax at issue (§ 387 (1) AO).
Local competence: see § 388 AO.
Tax Investigation (Steuerfahndung): operates as the enforcement arm of BuStra; typical tools include search and seizure.
Public Prosecutor: takes over if non-tax crimes are involved or where arrest/commitment is at stake (§ 386 (2)–(4) AO); arrest warrant powers may be relevant.
In court: BuStra frequently appears at the main hearing and coordinates with the prosecutor; see the course of criminal proceedings.

Special Forms of Tax Evasion (Focus Areas)

VAT Evasion & Carousel Fraud

Typical modes: undeclared outputs, sham invoices, unjustified input VAT, non-filing or false VAT returns. Carousel (“missing-trader”) schemes exploit multi-stage supply chains to siphon refunds. See VAT carousel fraud and VAT evasion.

Defence angles: transactional tracing, real-goods evidence, input-VAT entitlement, supplier due diligence, and knowledge standards.

Illicit Employment & Sham-Invoice Chains

Frequently organised via “service” intermediaries and paper subcontractors (construction, security, cleaning). Besides income/corporation tax and VAT, payroll withholding and social security may be affected; in parallel, labour-adjacent topics are sometimes touched by criminal procedure. Sums can reach eight figures.

Defence: separate legitimate turnover from sham flows; scrutinise workforce status, payroll trails and SOKA-Bau exposure.

Hidden Profit Distributions (verdeckte Gewinnausschüttungen, vGA)

Company side: increases taxable income if not declared.
Shareholder side: income from capital assets on receipt (including related parties).
Defence: corporate purpose, arm’s-length pricing, actual benefit recipient, timing and documentation.

Gaming Machines: “Saldo 1” & “Kurzstreifen”

Cash-intensive operations are audit magnets. Saldo 1 (cash-in minus payouts) forms gross takings (basis for income/corporation tax and VAT). Kurzstreifen are mere booking vouchers (§ 147 AO) and do not replace full digital retention.

If data are missing, the tax authority may estimate (§ 162 AO); some offices treat gaps as indicators of intent.
Defence: prove complete digital records, reconcile with entertainment tax (Saldo 2), explain anomalies (door openings, refills, seasonality), contest arbitrary estimates.

Cryptoassets & Income Tax

Currency tokens (e.g., BTC, ETH, XMR) are assets for § 23 EStG; sales (including swaps) within one year are taxable private disposals. Bitcoin & criminal confiscation highlights ownership/tracing issues.

Defence & compliance: maintain full trade logs, wallet evidence, FIFO/LIFO method, cost basis; align with evolving reporting regimes.

Gross Profit Mark-Ups in Hospitality

Courts may estimate bases using federal benchmark tables if other methods fail; estimates must reflect locality, concept and period.

Withholding & Embezzlement of Wages (§ 266a StGB)

Parallel risk in payroll cases; sentencing hinges on contribution amounts, continuity, record falsification and banded conduct.
Defence: calculation correctness, partial payments, intent, internal controls.

Tax Evasion & Money Laundering

Under the post-reform “all-crimes” approach, any unlawful act can be a predicate offence (see money laundering, § 261 StGB). Mere saved expenditure from evasion is not itself a launderable object; wrongful refunds/credits can be.

Defence: object qualification, tracing, and subjective element (intent/knowledge) for professionals.

Capital-Market Schemes

Cum-Ex: OTC sequences around dividend dates (short sales, TRS) to obtain multiple crediting/refunds of withholding tax. Courts regard claims based on assumed withholding as false/incomplete within § 370 AO. See Cum-Ex overview and our practice page on Cum-Ex/Cum-Cum defence.

Defence focus: economic ownership (§ 39 AO), actual tax deduction, certificate validity, intent and role segmentation.

Cum/Cum: Transfers to in-country holders before record date to avoid definitive withholding; authorities deny credit/refund where economic ownership did not pass. See Cum/Cum.

Criminal exposure: incomplete disclosure can trigger § 370 AO; omissions may be relevant via § 153 AO (duty to correct).
Defence: substance-over-form, beneficial-ownership tests, disclosure quality, audit trail.

Sentencing & “Rule-of-Thumb” Practice (Orientation Only)

Statutory range: fines or imprisonment up to 5 years; in particularly serious cases up to 10 years.
Indicative thresholds: ≤ €15,000: discontinuation with conditions sometimes feasible; ≤ €50,000: fines (often via penalty order); around €50,000: custodial sentences possible (often suspended); ≥ €1 million: usually non-suspended imprisonment, subject to mitigation.
Defence task: challenge calculations, periodisation and intent; push for proportionate outcomes.

Limitation Periods & Time Bars (Criminal vs. Tax)

Criminal Limitation (Verfolgungsverjährung)

Standard: 5 years; particularly serious tax evasion: 15 years.
Interruptions (§ 78c StGB) restart the clock (e.g., first interrogation, search orders, indictment).
Pausing (§ 78b StGB) now applies in tax cases; absolute caps up to 2× (standard) or 2.5× (serious cases) the basic period.

Tax Assessment Limitation (Festsetzungsverjährung)

Ordinary: 4 years; with evasion: 10 years.
Coupling clause: § 171 (7) AO ties tax assessment to criminal limitation—claims may remain open as long as prosecution is possible.

Record Retention During Tax Criminal Proceedings (§ 147 AO)

Retention is 6 or 10 years as a rule—but functionally extends until the end of the assessment period, which itself can be prolonged by procedural steps (§ 171 AO).

Defence: prove GoBD-compliant, machine-readable archives; avoid gaps that trigger estimates (§ 162 AO).

Negligent Tax Understatement (§ 378 AO)

Not a crime, but an administrative offence (gross negligence). Fines up to €50,000; in some constellations, leniency via self-disclosure may be possible.
When relevant: if intent under § 370 AO cannot be proven.
Duties: inform yourself, supervise delegated work, verify doubtful data; “blind signing” is risky.

Self-Disclosure (§ 371 AO) – Opportunities and Pitfalls

Must be complete, correct, timely; cover all non-barred periods per tax type and be followed by full payment (tax + interest).
Extended limitation rules can push look-backs decades back; partial/inaccurate disclosures risk ineffectiveness.
Defence: feasibility check, scoping all periods, securing records, staged payments where available.

Defence Strategy: How We Protect You

Forensic accounting & data reconstruction: secure raw data, rebuild flows, expose estimation errors.
Legal levers: attack mens rea (intent), quantify only proven minimums, challenge “savings” vs. launderable assets, test beneficial ownership.
Procedure: contest searches and seizures, monitor limitation clocks, leverage cooperation where beneficial, and secure file access.
Crisis moves: rapid advice on dawn raids, interview strategy, and—where suitable—self-disclosure.

FAQs: Tax Evasion Defence in Germany

What exactly triggers § 370 AO?

False/incomplete declarations or unlawful omissions on tax-relevant facts that lead to a tax shortfall or unjustified benefit. See tax evasion defence.

Is there a difference between criminal and tax limitation?

Yes. Criminal limitation (5/15 years plus interruptions/pausing) and tax assessment limitation (4/10 years) interact—§ 171 (7) AO may extend the tax window to match criminal pursuability.

How serious are VAT carousel allegations?

Very. Authorities scrutinise supply chains, input-VAT entitlements and knowledge standards. Early data preservation is critical; background: VAT carousel fraud.

Can missing gaming machine data lead to prosecution?

Yes. Absent long strips/raw data often prompt estimates (§ 162 AO) and may be read as intent. Maintain complete, machine-readable archives.

Does negligent understatement lead to a criminal record?

No—§ 378 AO is an administrative offence (fine). If intent is provable, § 370 AO applies instead.

How do Cum-Ex and Cum/Cum differ?

Cum-Ex targets multiple credit/refund of the same withholding tax through timing chains; Cum/Cum shifts shares pre-record date to in-country holders to avoid definitive withholding. Both raise beneficial-ownership and disclosure issues.

Can crypto gains trigger tax crime?

Yes, if wilfully concealed. Tokens are assets; sales/swaps within one year are taxable. Keep thorough records; see Bitcoin & confiscation.

When is imprisonment likely?

Indicatively above €1 million evaded tax, courts often impose non-suspended custodial sentences—subject to mitigation and case specifics.

Contact – Specialist Criminal Defence for Tax Cases

Buchert Jacob Peter – specialist criminal defence lawyers in Frankfurt am Main (nationwide representation). For immediate help—especially with police summons, penalty orders or indictments—reach out now.

Learn more about our practice areas, attorneys and English-speaking criminal law services in Frankfurt. Overview pages on procedure, judgments and further topics can be found in our legal dictionary.

Contact us – Your Specialist Criminal Defence Lawyers in Frankfurt am Main and across Germany

Additional qualifications include: Specialist Lawyer for Criminal Law; Certified Counsel in Business Criminal Law (DSV); Certified Accounting Experts (Dr. Endriss); EU Data Protection Officer.

Our law firm Buchert Jacob Peter has worked in Frankfurt am Main for over 25 years with experienced criminal defence lawyers. We represent clients nationwide.

Phone: +49 69 710 33 330
Email: kanzlei@dr-buchert.de
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