German federal state finance ministers have discussed improvements to the tax system and have decided on action to strengthen the “declaration of non-compliance” that permits residents to regularize their tax affairs without the possibility of criminal prosecution. As a result of recent improvements to this procedure it is only possible to escape prosecution if complete and accurate data is provided about the relevant assets.
A surtax of 10 percent is now to be imposed on undisclosed assets exceeding EUR 25,000, increasing to 15 percent on undisclosed assets more than EUR 100,000 and 20 percent on undisclosed assets above EUR 1 million. An annual 6 percent interest charge will be added and the reporting period for full disclosure will increase to ten years. A Bill is being drafted to bring this into law and the rules will become effective on 1 January 2015.
