Germany has unveiled an action plan to strengthen enforcement against tax and financial crime, including a new Joint Centre Against Tax and Financial Crime, AI-supported data analysis, higher penalties and the abolition of the current exemption from punishment for voluntary disclosure.
Germany is to strengthen enforcement against tax and financial crime under a joint action plan presented by Federal Minister of Finance Lars Klingbeil and Federal Minister of Justice Dr Stefanie Hubig on 16 July 2026.
The action plan focuses on improving cooperation between financial and investigative authorities, pooling expertise and findings from the federal and state governments, expanding data analysis, and increasing the deterrence and risk of detection associated with tax crime.
Joint centre against tax and financial crime
A new Joint Centre Against Tax and Financial Crime is to be established within the customs authorities. Tax investigators from the states and financial investigators from the customs authorities will coordinate important proceedings and exchange findings and expertise.
The model for the centre is the Joint Counter-Terrorism Centre (GTAZ). The new structure is intended to provide a comprehensive view of the structures of financial crime, patterns and suspected cases, including across state borders and through cooperation with international partners.
Existing federal and state structures will also be strengthened, while federal powers in tax investigation are to be expanded.
Germany’s Finance and Justice Ministers have outlined an action plan to strengthen the fight against tax and financial crime by increasing penalties, tightening voluntary disclosure rules, and improving the confiscation of illicit assets. The plan also proposes a Joint Centre Against Tax and Financial Crime and a Data Analysis Centre to enhance coordination between federal and state authorities and use AI to identify fraud risks and patterns more effectively.
Data analysis centre and AI-supported investigations
The tax administration is to be further modernised and digitised to improve the analysis of data used in the fight against tax crime.
A Data Analysis Centre is to be established jointly with the states, while cross-authority data access will be enabled. Tax data is to be brought together on a central data platform.
The authorities will develop AI-supported analytical tools to identify patterns in financial data. A VAT reporting system will also be introduced to prevent VAT fraud.
The retention periods for accounting records are to be extended to 15 years. Companies will be required to store tax-relevant data on mirror servers in Germany.
A cash register requirement will also be introduced, as agreed in the coalition agreement, to prevent tax fraud in cash-intensive sectors.
Higher penalties and stronger enforcement
Controls are to be expanded, while the penalty range for particularly serious cases of organised tax crime is to increase to up to 15 years’ imprisonment.
Serious tax offences are to be treated as crimes with a minimum prison sentence of one year. The instruments available for investigating and securing assets of dubious origin will also be expanded, alongside more targeted use of the federal tax audit.
The grey area of aggressive tax planning will continue to be examined to close legal loopholes. Training opportunities for tax judges at the Federal Finance Academy are also to be improved.
The proposed new criminal offence for particularly serious cases of tax evasion will affect criminal proceedings. In cases involving a crime, summary penalty proceedings under § 407 of the Code of Criminal Procedure – StPO and the termination of proceedings under §§ 153 and 153a StPO will not be possible.
Such cases must be brought before the courts and, if the court admits the main proceedings, heard in public court proceedings.
The federal tax audit will continue to follow a risk-based audit approach, which is to be expanded through an improved data basis. This is intended to reduce the burden on companies that comply with the rules and allow audits to focus on those suspected of having committed tax offences.
Tax simplification through standardisation and lump-sum arrangements will reduce the burden on taxpayers, particularly in relation to tax returns, and on the tax administration during audits. The resulting resources are intended to support additional audits.
Stricter rules for companies
Companies that evade taxes and deliberately disregard laws and regulations are also to face sanctions.
Amendments are planned to provisions governing fines against legal entities and associations of persons, including an increase in the maximum level of fines.
The systematic acquisition of data and structures for protecting whistleblowers are also to be strengthened to help identify tax avoidance at an early stage.
Voluntary disclosure exemption to be abolished
The action plan provides for the abolition of the exemption from punishment for voluntary disclosure in its current form.
Under § 398a of the Fiscal Code (AO), prosecution can currently be waived following a voluntary disclosure despite the commission of a tax offence. Taxpayers must pay the evaded taxes as well as a monetary amount based on the amount of tax evaded, ranging between 10% and 20%.
The government considers the current voluntary disclosure regime to create incentives for taxpayers to disclose only when they fear detection. The exemption from punishment for voluntary disclosure in its current form is therefore to be abolished.
European and international cooperation
The European Public Prosecutor’s Office is to be strengthened, with the responsible authorities working at European level to improve its effectiveness and financial resources.
International cooperation will also be intensified to block international escape routes for tax criminals. European and international administrative cooperation for joint investigations will be expanded, while new alliances will be sought and common standards promoted.
Transparency and accountability
Greater transparency is planned when companies are sanctioned for serious tax offences. Relevant information is to be made publicly accessible, subject to constitutional and data protection requirements.
The government also plans to introduce a scientifically supported estimate of the tax gap and systematically strengthen empirical tax research.
Further measures
The action plan forms part of wider Federal Government measures targeting tax fairness and financial crime.
The statutory powers of the Financial Control of Undeclared Work of the customs authorities have been strengthened to combat undeclared work and the exploitation of people.
The customs authorities will be strengthened in terms of staffing, with around 1,500 additional recruitment opportunities this year alone.
In February 2026, the Federal Ministry of Finance, together with the Federal Ministry of the Interior and the Federal Ministry of Justice, presented an action plan to combat organised crime, including measures for stronger action against financial crime, particularly money laundering.
The Federal Government is also due to adopt a draft Customs Financial Justice Act in the Cabinet. The legislation is to enter into force on 1 January 2027 and implement substantial parts of the action plan against organised crime.
Under the proposed legislation, the federal government will create powers needed by the customs authorities to combat organised crime and financial crime, including money laundering, more effectively and to enforce international sanctions.
The new EU Authority for Anti-Money Laundering (AMLA) has commenced its activities in Frankfurt am Main. Combating money laundering remains a priority for the EU and Germany.
As part of an EU legislative package targeting money laundering and terrorist financing, the EU has harmonised anti-money-laundering requirements across Europe and established, through AMLA, an EU authority dedicated to combating money laundering for the first time.
