Limitation periods for prosecution and the confiscation of the proceeds of crime in cases of tax evasion
As part of the Annual Tax Act 2020 Regulations that also, as it were, enter through the „back door“ are those that relating to criminal tax law included:
1. Limitation period for prosecution
By amending the Section 376(1) of the German Fiscal Code (AO) the limitation period for cases of particularly serious tax evasion (Section 370(3), second sentence, points 1 to 6 of the German Fiscal Code (AO)) has been extended from 10 years to 15 years.
According to the explanatory memorandum to the Bill, the extension of the limitation period is intended to enable the tax authorities to „ more time is allowed to identify matters relevant to criminal tax law in good time and to investigate them thoroughly. Particularly in the often highly complex cases of especially serious tax evasion, which increasingly have international dimensions, it proves, amongst other things, the need to seek administrative assistance from other countries that it is difficult and time-consuming to clarify the facts and identify the connections that reveal whether there are implications under criminal tax law.“
This provision applies to all offences for which the limitation period had not yet expired at the time it came into force (29 December 2020). No transitional provision has been introduced. Nor is there any protection of legitimate expectations for so-called „old cases“.
2. Confiscation of the proceeds of crime
After Section 73e(1), first sentence, of the German Criminal Code (StGB) the confiscation of the proceeds of the offence or compensation for the loss in value in accordance with Sections 73 up to 73c excluded under the German Criminal Code (StGB), in so far as the claim arising for the injured party from the offence – for the restitution of what was obtained or for compensation for the value of what was obtained – has lapsed. According to the case law of the Federal Court of Justice (BGH), in cases of tax evasion, confiscation was therefore, in principle, no longer possible if the claims arising from the tax liability had, pursuant to Section 47 of the German Fiscal Code (AO) had become time-barred and had therefore lapsed (Federal Court of Justice, Order of 24 October 2019 – 1 StR 173/19). With Section 73e(1), second sentence, of the German Criminal Code (StGB) This provision has been supplemented by an exception in order to counteract the case law of the Federal Court of Justice.
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