In 1996, the financial administration accused the tennis icon Steffi Graf of evading taxes in the amount of DM 41 million. The tennis player invoked her manager, i.e. her father Peter Graf, as well as her financial advisor and longtime friend of the family, Horst Schmitt, and her tax assistant, Joachim Eckardt. Her father was then placed in custody, but was able to save his daughter from further consequences of the tax investigation and prosecution. In court, Peter Graf still had to answer. This finally found him guilty in 1997 of having withheld his daughter’s income of DM 12.3 million from the Treasury between 1989 and 1993. Therefore, he had to serve a prison sentence of three years and nine months. So he probably protected his daughter Steffi Graf from punishment for tax evasion.

Several athletes at home and abroad have become internationally known for more than their sporting excellence. In Germany, this is especially true of Boris Becker and Steffi Graf. Both had caused a sensation with their tennis game around the same time and thus offered the Germans a projection screen for national pride. Apart from that, for Steffi Graf and Boris Becker, the fame they deservedly received was worth more than just one or the other honorary title. Because of their celebrity and notoriety, they were also an ideal advertising partner, as they are in top sports everywhere. And that literally pays off brilliantly for everyone involved.

To be honest, it has basically always been like this: top athletes earned a lot of money with their services. Even the Olympians in antiquity (as well as the winners of numerous other competitions, which are of course far less well known) could expect lavish financial compensation. For honor alone, sport has probably never paid off. After all, honoring a victory in Olympia beyond the olive branch wreath often included a lifelong tax exemption.

Such a tax exemption for all their income would certainly have pleased Steffi Graf and Boris Becker very much. Germany has no exceptions. So what do you do?

If you want to save taxes in Germany in our times as a top athlete, you can either use solid tax saving models or commit tax evasion. In between – and yes, this field is large – there is a grey area that can be explored, but one can only predict conditionally whether this is ultimately worthwhile or perhaps proves to be a serious mistake. If we now look at the case of Steffi Graf’s tax evasion, we go into this grey area. Because at that time, her financial advisors, her father, tax assistant Joachim Eckardt and the former friend and helper of the family, Horst Schmitt, had built up an international corporate construct that was to cover up Steffi Graf’s income, and thus tax evasion.

Peter Graf and Horst Schmitt first founded Sunpark Sports B.V. in Amsterdam. Through this company, sponsors concluded contracts if they wanted to win Steffi Graf as an advertising medium. Shortly thereafter, Sunpark Sports N.V. was founded in Curaçau, the capital of the former tax haven of the Netherlands Antilles. The company’s network was structured in such a way that the Dutch Sunpark Sports B.V. became a subsidiary of the Dutch Antilles. The latter had the trademark rights and other intellectual property in relation to Steffi Graf. Dutch B.V. granted sublicenses to sponsoring partners and paid royalties to its parent company in Curaçau. The profits were transferred via the Netherlands to the Caribbean tax haven, without, of course, that the German Treasury should know about it.

The reason for this was that the Sunpark Sports subsidiary in Amsterdam at that time in the Netherlands was able to use a special tax regime in combination with royalties to the parent company. 93 % of the licence payments in the Netherlands were deductible. Thus, the country has taxed only 7% of the sponsorship income. In the Netherlands Antilles, on the other hand, tax law provided for the taxation of such licence fees with a maximum of only 3 %.

All in all, you could save enormous taxes with this design model via license payments. However, this was only possible if one escaped the unlimited tax liability in Germany. Boris Becker had done the same, because he moved to Monaco. However, Steffi Graf remained in Germany, so she was accused of tax evasion.

Another network is said to have existed by companies in the Bahamas. However, only a few details are known, so that we bring the corporate structure of the Netherlands / Netherlands Antilles to the fore.

The Grafs also used a construct in which Avantage GmbH, which they founded in Liechtenstein, played a role. This company also had contracts with Steffi Graf, which were intended for tax evasion. Allegedly, about DM 20 million in black money flowed through this intermediate station.

Another element of tax evasion for Steffi Graf was the division of sponsorship contracts. Often only a small part of the sponsorship proceeds went through the name Steffi Graf, while the rest was handled through the foreign corporate structures. Steffi Graf then taxed the smaller share of the income in Germany. However, it would have had to pay tax on the entire proceeds from all contracts, because a distribution of the revenues solely for tax avoidance is not allowed. Steffi Graf, however, has invoked the fact that she had no idea of such rules, so she was not aware of tax evasion.

Now it is the case that one must commit tax evasion as an at least partially conscious act in order to be considered a tax evasor in the legal sense. However, since Steffi Graf could credibly assure that she had no knowledge of tax evasion because her father managed her tax law concerns, she was spared from prosecution. Although some doubts arose as to whether this presentation was true. But in the end, her father confirmed that he was solely responsible for his daughter’s tax evasion.

The fact that the tax assistant Joachim Eckhardt was also in the sights of the tax investigation was certainly also important. He was responsible for the tax details. In this capacity, however, he would have been obliged to draw attention to tax evasion. But since he collaborated with Peter Graf to bring about the tax evasion, he is said to have concealed the tax evasion from her.

In the end, according to the law enforcement authorities, there was no sufficient suspicion to charge Steffi Graf himself with tax evasion. In addition, her legal counsel obtained from the public prosecutor’s office that the investigation proceedings against her should be discontinued pursuant to § 153a StPO. In this context, both parties agreed on a monetary charge of DM 3,000,000. However, this obviously went too far for the public prosecutor. Shortly after, she conceded the agreement again. But since the judges who tried Peter Graf and Joachim Eckhardt also accepted Steffi Graf's innocence, their recommendation for the later cessation of the investigation against them probably had some weight.

But how did the tax affair about the tennis queen end? Since she herself apparently played only a minor role in this case, the efforts of the public prosecutor concentrated on the people who had promoted the act in the tax evasion.

Peter Graf received a prison sentence of three years and nine months without parole in 1997. For tax assistant Joachim Eckhardt, the judges imposed a prison sentence of two years and six months. These were quite mild sentences, because the public prosecutor’s office had demanded, for example, for Peter Graf more than six years in prison. However, the judges emphasized in their reasoning that the financial authorities met a partial guilt, because they could and should have met the tax activities much earlier.

The former Adlatus Horst Schmitt escaped prosecution because he separated from the Graf family in the meantime and emigrated to Spain. He is said to have entered into a non-disclosure obligation, which would bring him co-liability for any tax claims in the event of an infringement. Nevertheless, he has repeatedly suggested that Steffi Graf had also been informed at least about parts of the financial constructs.

For Steffi Graf, the decision per tax evasion and contra tax consulting ultimately also cost expensive – literally. Instead of optimizing the taxes previously by professional tax consulting, she now had to pay taxes in the amount of about DM 27 million. In their defense, one can at least make an argument: Meyer’s advisory tax consulting only existed later.