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Tax evasion: amnesty Germany 2004/2005
Amnestie decision [1, 4]
After Italy in 2001 und 2003*, Germany enacted a taxation amnesty for the period 01.01.2004 - 31.03.2005, through passage of an act on the penalty-free admission, coded as Article 1 of the law on the fostering of taxation honesty.
Such an amnesty is a feast for the tax and legal advisor branch, and was celebrated euphorically.
*) In 2009/2010 Italy enacted yet a third amnesty.
The amnesty was intended to achieve a payment in lieu of past taxation liabilities (1993-2002), and at the same time offer penalty exemption for the involved parties. Gratifying for german investors in Switzerland, and therefore also for Swiss banks, is that no capital needed to be transferred back to Germany (in contrast to the Italian amnesties). The penalty exemption also encompasses third parties (e.g. the bank employee who would otherwise be charged with aiding and abeting, the investment consultant).
Incentive for tax evaders [2, 3, 4]
People could clean their record (and their conscience) by paying a relatively low flat rate tax. During 2004 the nominal rate was 25%, thereafter until 31.03.2005, 35%. Because of exemptions and allowances, the effective
rate was a good deal lower than that.
The amnesty offer had advantages in comparison with the self-indictment model (-> page 3: Germany-Switzerland 2010): 15% interest payable in arrears instead of 70%, and the not disclosed income taxed with 25/35% instead of 85%.
In addition, the estimation of the tax load is done by the evader himself. The taxation department cannot initiate own investigations, unless the declared income is less than the actual income. In practice, the evader's declaration must appear sufficiently plausible and self-consistent.
Great expectations [5, 6]
Originally, the government had hoped for revenues in the order of €25 billion. In January 2004 the estimate was corrected to ca. €5 billion. Even this was seen by experts as too optimistic.
Result [4, 5]
The amnesty brought only €1.2 billion in revenue, coming from 15,000 individuals. As the data CD from Liechtenstein (-> page 2, Germany-Lichtenstein 2008) and the case "Zumwinkel" have demonstrated, many high-income tax evaders had made no use of the penalty exemption.
Beyond amnesties: The net is being woven more tightly, but large holes remain
In order that tax evasion can be countered more effectively, a law was passed to allow the taxation offices from 01.04.2005 onward an automated means to discover with which financial institutes a particular tax payer maintains an account or a depot.
The EU Interest Regulation, an EU-wide reporting obligation for banks, covers specific interest that is due to a recipient who is (tax-wise) registered in a different EU country to that of the bank. The recipient's name, account number and the amount of interest is passed on to the recipient's local tax office. This reporting obligation has exceptions. It does not apply to Luxemburg, Austria and Belgium. Nor to Switzerland (not belonging to the EU).
From 2006 onward, banks in EU countries (other than those in Luxemburg) are obligated to provide cross-border information on account changes/events in cases of concrete suspicion of tax evasion.
 Private Magazin "Steueramnestie in Deutschland", 3/2003 [deutsch/engl.]
 Welt "Wie sich Schwarzgeld legal nach Deutschland holen lässt", 17.12.2003
 pdf Steuer Revue "Steueramnestie in Deutschland – Chancen und Risiken aus Beratersicht", Nr. 11/2004 sS.802
 Finanztip "Steuer-Amnestie bei Schwarzgeld", Datum?
 Finanztip "Wenig Resonanz: Steueramnestie blieb hinter Erwartungen zurück", 31.03.2005
 Haufe "Das Netz wird immer dichter", Consultant, Heft 1-2/2007