The German federal government intends to tackle tax and financial crime more rigorously going forward. Federal Finance Minister Lars Klingbeil and Federal Minister of Justice Stefanie Hubig (both SPD) jointly introduced an “Action Plan” on Thursday, designed to increase the risk of detection for tax evaders and strengthen cooperation among investigative authorities.
A core component of this package is the establishment of a “Joint Center against Tax and Financial Crime” within customs. This center will facilitate close collaboration between state tax investigators and federal financial investigators, allowing them to exchange findings and coordinate complex cases effectively. Additionally, a nationwide data analysis center is planned, which will utilize artificial intelligence to process vast amounts of data, enabling the faster identification of fraudulent patterns.
The federal government is also planning several legislative tightening measures. Particularly severe cases of organized tax crime will henceforth face penalties of up to 15 years in prison. These offenses will be classified as crimes and must be tried through public judicial proceedings.
Furthermore, the currently permissible self-disclosure that offers immunity from prosecution is planned to be abolished in its existing form. The government argues that the current regulation creates unintended incentives, as tax defaulters often only come forward just before an investigation is imminent.
Other planned measures include mandatory cash register usage for cash-intensive industries, extending the retention period for accounting vouchers to 15 years, and mandating that companies store tax-relevant data on mirror servers within Germany. Moreover, a digital VAT reporting system will be introduced, and federal tax audits will be deployed more strategically using improved data analytics.
Companies that commit tax evasion should also prepare for stricter sanctions. Higher fines are planned for legal entities, alongside improved protection for whistleblowers. Furthermore, sanctions against companies found guilty of serious tax offenses will be made public.
The Action Plan also emphasizes closer European and international cooperation. This includes strengthening the European Public Prosecutor’s Office and expanding cross-border information exchange during investigations. According to the government, this comprehensive package aims to ensure greater tax fairness and combat organized tax and financial crime more effectively.
