Managing directors and board members can quickly (rightly and wrongly) get into the crosshairs of the public prosecutor's office, tax office or customs.
In the event of deliberate or negligent infringements, the authorities can immediately initiate criminal or administrative proceedings.
Commercial criminal law basically covers all offences that can be classified as economic offences in the broadest sense. This includes criminal offences such as
- (Supplier) fraud,
- Insolvency offences and
- (Customs) Tax offences (in particular tax evasion, tax risks and smuggling),
- Violations of excise tax laws (in particular tobacco tax, alcohol tax and energy tax), and
- Violations of foreign trade law.
Under German law, companies (legal entities; UG, GmbH, AG, but also nonprofit UG, GmbH and association) are not liable to prosecution as such. In these cases, it is instead the responsible managing directors who are liable for violations of the law by the company. This applies to both appointed and de facto managing directors (i.e. those who do not formally hold the office but act as managing directors).
Nevertheless, companies can be sanctioned according to the administrative offence law: If a representative of the company commits an offence (criminal offence or administrative offence), the company can be charged a fine in millions in accordance with § 30 of the German Administrative Offences Act (OwiG).
The Cum-ex, Cum-cum and Goldfinger businesses are tax saving models that were made possible by exploiting a loophole in the law. What's special about these cases: Although the addressed gap in the law and their potential for abuse were well-known to the Ministry of Finance, over the years, the legislator did not change anything at the regulations concerned.
Since criminal tax law is essentially "Blanket Crime law", i.e. criminal law based on the violation of tax regulations, the assessment of the fiscal situation is decisive for criminal liability. If the tax savings model is to be regarded as compatible with tax law in terms of obtaining tax privileges, there is no criminal liability for tax evasion. Special knowledge of tax law facts is therefore indispensable for criminal defense in criminal tax matters.
The same applies, for example, to criminal offences under customs law – including commercial criminal law – such as tax evasion through under-invoicing, violations of foreign trade regulations and violations of excise tax law (tobacco tax, alcohol tax). Up to now, such violations have had little media impact, but are at least as serious and significant.
Violations in customs matters are not only a criminal offence, but can also result in considerable economic losses. Here in particular, effective and comprehensive compliance, including the training of the acting employees, is indispensable. Skillful negotiations with the customs offices are central to this and will be handled by our attorneys for customs and commercial criminal law offences for those affected.
Apart from obvious intentional acts, many offences are often committed unintentionally: We often observe, for example, that ignorance of customs regulations (incorrect invoice prices, transport costs are not correctly added, development costs or consideration from other transactions are not taken into account) leads to a too low import tax assessment. Violation of only one of the numerous national and EU import regulations can also lead to criminal liability (e.g. breach of duty).
The same applies if goods are sold to Turkey, for example, but ultimately end up in Iran. Here, too, it depends to a large extent on whether senior employees were aware of the infringements and whether this is credible. In tax evasion, the decisive factor is usually whether the mistakes were committed negligently or whether there was a deliberate illegal act. The objection that one has insufficient knowledge of violations of the law or even of the relevant regulations is often regarded by the tax authorities as an irrelevant claim for protection or the argument is used that one may have to acquire the necessary expertise, e.g. through legal advice.
According to our observations, the accusation of tax evasion is sometimes made overzealously by some tax officials. This is usually done for strategic reasons in order to be able to use further legal powers which would not be possible without criminal proceedings.
In principle, an investigation procedure is initiated because of an initial suspicion of the commission of a criminal offence. During a hearing, the accused should make use of his right to refuse to testify and only testify in the presence of his defense counsel or after prior consultation with him.
As a rule, the aim of the defense should be to close the pre-trial procedure and thus prevent an indictment and legal proceedings against the defendant. If a charge is brought, the defense strategy is to acquit or reduce the sentence and terminate the proceedings as quickly as possible in order to minimize the damage to the reputation.
Due to long limitation periods and new investigation methods, crimes can not only be detected after years, but also punished as well. The criminal statute of limitations system is very complex, especially in combination with tax issues.
In order to identify and avoid errors, especially in the sense of effective compliance, companies as well as private individuals should use preventive advice to detect errors. At the latest after the initiation of criminal proceedings or in the case of a (house) search, those affected should immediately seek criminal advice in order to keep all defense strategies open and be able to choose the best one.
In the case of an early defense, our attorney for commercial criminal law can, within the framework of the legal possibilities, exert influence on the investigation procedure in favor of the accused.
Not only do we advise entrepreneurs, shareholders, managing directors, supervisory boards and board members, but also employees on all aspects of allegations:
- Tax evasion of any kind
- Violations of foreign trade law (e.g. unauthorized export)
- Tobacco, energy and alcohol tax procedures
- Corruption allegations
- Embezzlement and breach of trust
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