The end of exemption from punishment through voluntary disclosure of tax evasion?

Last reviewed October 2026

Anyone who has evaded taxes can obtain exemption from punishment by means of a voluntary disclosure (Selbstanzeige) under Section 371 of the German Fiscal Code (Abgabenordnung, AO). The law makes this effect subject to strict conditions. At the same time, voluntary disclosure is under discussion. According to an action plan presented by the Federal Ministry of Finance and the Federal Ministry of Justice and Consumer Protection on July 16, 2026, voluntary disclosure leading to exemption from punishment is to be abolished in its current form. This article explains the current law and the status of the plan.

Effect of a voluntary disclosure

Under Section 371(1) AO, a person is not punished for tax evasion if, with regard to all tax offenses involving one type of tax, they fully correct the incorrect information, supplement the incomplete information, or provide the omitted information to the tax authorities. According to the wording of the law, the exemption from punishment applies only to criminal liability under Section 370 AO. It does not cover other offenses committed in connection with that offense. The taxes remain due. The law does not prescribe any particular form for a voluntary disclosure.

Completeness of the information

The information must cover all tax offenses involving one type of tax for which the limitation period has not yet expired, but at least all tax offenses involving that type of tax within the last ten calendar years (Section 371(1) sentence 2 AO). This period can extend beyond the criminal limitation period. For tax evasion, the limitation period is in principle five years (Section 78(3) no. 4 of the German Criminal Code, StGB), but 15 years in the especially serious cases under Section 370(3) sentence 2 nos. 1 to 6 AO (Section 376(1) AO). The tax authorities can assess evaded taxes within a period of ten years (Section 169(2) sentence 2 AO).

If information on an offense involving the same type of tax is missing, the requirements of Section 371(1) AO are not met. A voluntary disclosure therefore requires that the tax bases for all years covered be determined as precisely as possible. According to case law, only minor deviations are harmless; a deviation with an effect of more than five percent of the amount of tax evaded is no longer minor (BGH, decision of July 25, 2011, 1 StR 631/10).

Exclusion of exemption from punishment

Section 371(2) AO lists circumstances in which a voluntary disclosure does not lead to exemption from punishment. Exemption from punishment does not apply if

  • an audit order for a tax audit has been notified to the person involved in the offense, their representative, the beneficiary, or the beneficiary’s representative,
  • the person involved in the offense or their representative has been notified that criminal or regulatory fine proceedings have been opened,
  • an official of the tax authorities has appeared for a tax audit, or an official has appeared to investigate a tax offense or a tax regulatory offense,
  • an official of the tax authorities has appeared for a spot check and has shown identification, for example for a VAT spot check or a payroll tax spot check,
  • the offense had already been discovered in whole or in part and the offender knew this or, on a reasonable assessment of the facts, should have expected it,
  • the tax evaded or the unjustified tax advantage exceeds 25,000 euros per offense, or
  • an especially serious case under Section 370(3) sentence 2 nos. 2 to 6 AO exists.

For the first five grounds, what matters is the time of the correction. The bar resulting from an announced or commenced tax audit is limited to the subject matter and period covered by the audit. A correction remains possible for the other tax offenses involving the same type of tax (Section 371(2) sentence 2 AO).

Payment of taxes and interest

If taxes have already been evaded, the person involved in the offense is exempt from punishment only if they pay the taxes evaded in their favor within a reasonable period set for them (Section 371(3) AO). Within this period, the interest on evaded taxes under Section 235 AO must also be paid, as well as the interest under Section 233a AO to the extent that it is credited against the interest on evaded taxes, and, for import and export duties, the late payment interest under Article 114 of the Union Customs Code. Interest on evaded taxes amounts to half a percent for each full month (Section 238(1) AO). Anyone who misses the deadline does not obtain exemption from punishment.

Amounts over 25,000 euros

If exemption from punishment does not apply solely because the amount exceeds 25,000 euros per offense or because an especially serious case under Section 370(3) sentence 2 nos. 2 to 6 AO exists, Section 398a AO provides for the possibility of refraining from prosecution. The requirement is that the person involved in the offense pays, within a reasonable period set for them, the evaded taxes and the interest that must also be paid in the case of a voluntary disclosure (Section 398a(1) no. 1 AO), and additionally pays a sum of money to the state treasury. This sum amounts to

  • 10 percent of the evaded tax if the amount evaded does not exceed 100,000 euros,
  • 15 percent if it exceeds 100,000 euros and does not exceed 1,000,000 euros,
  • 20 percent if it exceeds 1,000,000 euros.

If the tax authorities later find that the information in the voluntary disclosure was incomplete or incorrect, the concluded proceedings can be reopened (Section 398a(3) AO).

Special cases

Relief applies to advance VAT returns and payroll tax returns (Section 371(2a) AO). Here, the voluntary disclosure takes effect to the extent that the information is corrected, and the limit of 25,000 euros does not apply. This relief does not apply to tax returns relating to the calendar year.

Anyone who, as a taxpayer or on behalf of a taxpayer, understates taxes not intentionally but recklessly commits a regulatory offense. The fine can amount to up to 50,000 euros (Section 378(1) and (2) AO). It is not imposed if the information is corrected before notice of the opening of criminal or regulatory fine proceedings has been given, and the understated taxes are paid on time (Section 378(3) AO).

Voluntary disclosure must be distinguished from the duty to correct under Section 153 AO. If a taxpayer subsequently realizes, before the assessment period expires, that a return is incorrect or incomplete and that this may lead or has led to an understatement of tax, they must report and correct this without delay. Anyone who breaches this duty may be criminally liable for tax evasion by omission (Section 370(1) no. 2 AO; BGH, decision of March 17, 2009, 1 StR 479/08).

The proposal in the action plan

On July 16, 2026, the Federal Ministry of Finance and the Federal Ministry of Justice and Consumer Protection presented an action plan against tax crime and financial crime. The Federal Ministry of Finance’s press release states that voluntary disclosure creates false incentives to come forward only once one fears discovery, and that voluntary disclosure leading to exemption from punishment should therefore be abolished in its current form. In this context, the press release mentions refraining from prosecution under Section 398a AO. As early as April 2026, the Federal Minister of Finance had mentioned in an interview a model under which, above certain amounts, a voluntary disclosure would only have the effect of mitigating the sentence.

By October 17, 2026, the Federal Government had not published a bill on voluntary disclosure. On September 23, 2026, the Federal Cabinet adopted a bill on the further development of cash register records and on combating tax evasion, with which, according to its own statement, the Federal Ministry of Finance is further implementing the action plan. The related press release does not mention voluntary disclosure. According to press reports, leading business associations have spoken out against the abolition.

As long as the legislature does not decide otherwise, Sections 371 and 398a AO continue to apply unchanged. Whether new rules will contain transitional provisions for offenses committed before they enter into force remains open.

This article provides a general overview of the law and is not a substitute for advice on your individual case.

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