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4. June 2021 | Investigative proceedings: When does criminal tax proceedings begin?

11. November 2021 | Search and tax investigation – Your rights: Avoid mistakes!

18. November 2021 | Tax evasion and fraud cannot exist at the same time! Delineation and consequences

27. January 2022 | Proof prohibition in criminal tax proceedings What is this and what is there to consider?

09. June 2022 | What side effects can a criminal tax case have and how do you defend yourself against it? (this contribution)

A criminal tax procedure is important for the taxpayer not only against the background of the tax code and criminal law. Rather, this can also have an impact on other areas of law. These too must be kept in mind and defence possibilities developed against them. We show some side effects of the criminal tax procedure.

Penal tax proceedings can have side effects in various areas of law and therefore affect personal, social or entrepreneurial life. But should not the so-called presumption of innocence apply in view of Article 6 II of the ECHR? This states that a suspect is considered innocent until his guilt has not been legally confirmed.

The presumption of innocence is only intended to protect against sanctions. Criminal law is basically a sanction. Administrative law, on the other hand, focuses on the principle of prevention. This means that a decision for the future must be made preventively on the basis of past behaviour. However, this means that the presumption of innocence cannot take effect, otherwise no decision can be made based on past behavior. Rather, it would have to wait until the final decision. But that is not always reasonable.

Nevertheless, only a suspicion is in question before a final decision. It may therefore be that an innocent person is also made by the decision. Therefore, strict conditions are required for a suspicion to justify a burdensome decision. Therefore, well-founded objective facts must justify an urgent suspicion which makes the commission very likely. The offence must be serious and the urgent suspicion must not be eliminated until the last hearing. For example, it plays a role whether there is only a tax offence or even a tax crime. All burdens and reliefs arising in the course of the procedure shall be taken into account if they were already objectively available before the onerous decision. In the context of the defence, it must therefore be examined whether this sufficient suspicion exists.

But of course the question arises as to whether the tax office may send the sensitive data of the taxpayer to other authorities. This could be opposed by the tax secrecy from § 30 AO. However, § 30 paragraph 4 no. 5 AO empowers the tax authority precisely to pass on the data. Also Article 6 (1) sentence 1 lit. e) DSCVO does not preclude the transfer. Accordingly, the processing of personal data is lawful if it is for the performance of a task that is in the public interest or in the exercise of public authority. The latter is here. Thus, information can be passed on to other authorities. Thus, tax secrecy does not preclude the side effects of criminal tax proceedings.

Administrative law is based on the idea of reliability. Therefore, someone should be allowed to do something as long as he is reliable. Consequently, many authorisation bases for the withdrawal of a licence or for a prohibition are conditional on unreliability. The concept of unreliability is therefore of particular importance for the assessment of the side effects of the criminal tax proceedings.

But the term “unreliability” opens up normative evaluations and is therefore an indeterminate legal concept. With such vague legal concepts, there are two important questions that must always be considered. On the one hand, it must be clarified whether the indeterminate legal concept violates the principle of determination derived from Article 20(3) GG and, on the other hand, to what extent the decision of the authority is subject to judicial review.

As part of the principle of determination, it should be noted that the legislature cannot regulate every conceivable situation individually. Then many inadmissible individual laws would emerge. Therefore, it must be possible for the legislator to use indeterminate legal terms. Since the term “unreliable” has been sufficiently specified by years of jurisprudence, it also satisfies the principle of certainty.

The question of judicial review of an administrative decision is about the scope for assessment of an authority. Unreliability is justified by demonstrable facts. It is therefore not a matter of a complex balancing decision by the authority in the context of a one-off situation. Rather, the court can still assess the situation later on just as well as the authority. Therefore, the Börde has no discretion to assess. Thus, the decision whether someone is unreliable is subject to full judicial control. Therefore, the factual requirements of a secondary consequence of the criminal tax proceedings, if it is based on unreliability, are also fully verifiable by the courts.

According to § 125c paragraph 4 BRRG, facts from criminal proceedings may be transmitted to the competent superior of the taxable officer. However, due to special circumstances of the individual case, this must be necessary for official measures. Therefore, knowledge of the facts must outweigh the legitimate interest of the official in the exclusion of transmission.

In the selection of the disciplinary measure, considerations shall also be made. The appropriate measure shall be based on the seriousness of the misconduct, taking due account of the official's personal image and the extent to which the trust of the employer or the general public is damaged.

This balancing shall be based on the principle of guilt and proportionality. Therefore, the disciplinary measure must be proportionate to the seriousness of the misconduct and the fault of the official, taking into account all the onerous and discharging circumstances of the individual case. The principle “in dubio pro reo” applies (in case of doubt for the defendant). Therefore, in particular when determining the seriousness of the misconduct, only those incriminating facts which are established to the conviction of the court may be taken into account. On the other hand, exonerating circumstances are already significant when there are sufficient factual indications that they exist and further clarification is not possible. Therefore, a lesser circumstance, which cannot be ruled out without reasonable doubt after exhaustive clarification, should be included in the overall assessment.

According to § 45 paragraph 2 sentence 6 1 WaffG, a weapons permit is to revoke the so-called weapon possession card according to § 10 paragraph 1 WaffG if facts occur which should have led to refusal. This is in accordance with § 4 (1) number 2 Alternative 1 WaffG, if the applicant does not have the necessary reliability within the meaning of § 5 WaffG. As a rule, these do not have persons who have been sentenced to a fine of at least 60 daily rates or at least twice to a lower fine. However, five years may not have elapsed after the last conviction has taken effect.

According to the sense and purpose of § 5 paragraph 2 WaffG, the security risk present with each weapon possession should be kept as low as possible. Therefore, only persons should be able to be in possession of a weapon who handle the weapon properly at all times and in all respects. The presumption of unreliability above a certain amount of the fine does not presuppose that other adverse circumstances have become known about the gun owner in addition to the conviction. Therefore, it does not depend on a reference to the handling of weapons. Consequently, unreliability is not determined by the nature of the offence committed. Rather, only the legal consequences, namely the amount of the penalty imposed, are decisive. Therefore, criminal tax proceedings can justify the withdrawal of a gun ownership card, even though it has no connection to the use of weapons.

Probably the most frequent secondary consequence of the criminal tax proceedings is the prohibition of a business enterprise according to § 35 (1) GewO. The power of prohibition for a non-licensed trade must be based on the unreliability of the trader. It is unreliable who, in the overall picture of his behavior, does not offer the guarantee that he will operate his trade properly in the future.

However, if the trader becomes reliable again in the course of the procedure, for example, because he has paid his tax liabilities, one might think that the prohibition would be unlawful and the trader could continue his business. However, the regulation of § 35 paragraph 6 GewO must be observed. Therefore, there are special reasons that justify allowing the trader to continue his trade without having to close it for a year. Therefore, the trader must in principle have closed his trade for one year. But all these side effects can be avoided by obtaining immunity from punishment through self-reporting in the context of criminal tax proceedings. This suggests that you cross the “golden bridge” back into legality and so unreliability can no longer be accepted.

According to § 15 paragraph 2 GastG, a permission under gastronomy law is to be revoked if facts subsequently occur which would justify the refusal of permission under § 4 paragraph 1 sentence 1 no. 1 GastG. For this, it depends again on the necessary reliability. This concept of “reliability” under hospitality law corresponds to the concept of § 35 (1) GewO.