The government plans to combat tax and financial crime with an action plan.

The German government’s proposed action plan is not yet law, but it demonstrates the political will to detect, prosecute, and punish violations of tax and financial laws more quickly and consistently in the future. The 26-measure action plan includes, for example, abolishing the current system of impunity for tax evasion and contains stricter regulations for tax evasion by companies.

The action plan proposes increasing the maximum penalty for particularly serious cases of organized tax crime to 15 years’ imprisonment instead of the current 10, and classifying serious tax offenses as felonies with a minimum sentence of one year. Furthermore, companies that have committed serious tax offenses are to be recorded in a public register. This could have an impact on financing, procurement procedures, and business relationships.

When considering voluntary disclosure, it’s important to remember that it’s not only relevant for cases of foreign accounts that cannot be declared for tax purposes, but also plays a significant role in internal investigations, complex tax assessments, and subsequent corrections within the company. Tax compliance, tax documentation, and internal clarification will therefore become even more crucial for businesses. This is especially true in cases involving cross-border transactions, VAT structures, or dividend structuring.

Furthermore, the action plan aims to expand the customs authorities’ investigative activities and promote the exchange of information between state tax investigators and customs financial investigators in a new Joint Center against Tax and Financial Crime at the customs office. In addition, a data analysis center is to be established that will consolidate tax data on a central data platform, evaluate it using AI-supported analytical tools, and enable cross-agency data access.

Finally, the retention periods for accounting documents are to be extended to 15 years. As part of a deregulation effort, the retention periods had only been shortened from ten to eight years in 2025.

For further questions regarding the action plan, please contact the experts at the Altehoefer law firm for international tax consulting.