To date, there is no corporate criminal law as such in Germany. In contrast, this area of law has a long tradition, particularly in the USA, but also in other European countries, and has long occupied the legal departments of corporate groups with defence advice on the one hand and precautionary measures on the other, in order to structure corporate processes in such a way that potential sanctions do not arise in the first place.
As already mentioned in the TAXGATE Blog from 01.09.2020, a corporate criminal law is now also to be introduced in Germany under the title "Act to Strengthen Integrity in Business". The following section outlines the possible consequences of such a serious legal change for criminal tax law.
The decisive factor for this link between the two areas of sanction law is the classification of a tax offence as an association offence within the meaning of sec. § Section 2 (1) no. 3 VerSanG-E.
While criminal tax law applies exclusively to natural persons and is limited to the sanctioning of tax evasion in the area of German tax law, the new corporate criminal law will also apply to legal persons in particular and, moreover, is not limited to domestic offences.
For domestic matters, the voluntary disclosure exempting from punishment will in future also have a protective function against possible sanctions under the VerSanG-E. However, it should be noted that voluntary disclosure is not always possible or is subject to a penalty surcharge. However, even if a subsequent declaration is no longer fully exempt from punishment, it should at least mitigate sanctions both in criminal tax law and, in future, in corporate criminal law.
An important pillar of preventative measures with regard to future corporate criminal law will be a company's internal tax control system ("Tax Compliance Management System" or "Tax CMS"). Although not yet required by law, a compliance system will become de facto mandatory after the transition period has expired at the latest. In future, such internal control systems will at least enable management to protect itself from accusations that it has not taken sufficient precautions against relevant association offences, which can include all taxes, in particular social security contributions. In the case of VAT, for example, a large number of recurring transactions over long periods of time can quickly result in high additional tax claims, which can also be subject to an association sanction in the future. This is already reflected in the planned changes to the Fiscal Code, according to which, for example, the utilisation of certain data for the prosecution of non-tax offences is to be permitted. Tax audits are also becoming more important, even though the utilisation of auditor findings in the case of (alleged) association offences does not yet appear to be conclusively regulated. However, if you do not want to rely on possible legal protection in criminal proceedings, additional compliance measures should be examined or considered for implementation in good time. This also applies in particular to the structuring of investments, where violations of capital market and supervisory law can also lead to high association sanctions if they are alleged in the course of a fund audit, for example.
However, the mere implementation of control systems alone will hardly prevent possible sanctions. On the one hand, the complicity of managing directors is associated with considerable risks for the company in the future. On the other hand, experience has shown that even the best control system is of little help if criminal offences are sanctioned but their implementation is "facilitated" by insufficient forensic vigilance. Not least the Wirecard scandal shows that even traditional auditing, with its concept developed in the 19th century, repeatedly reaches its limits here.
Conclusion: The forthcoming corporate criminal law is forcing efficiency in the area of compliance - even if the tax CMS is nothing new, such internal control systems as well as their permanent maintenance within a systematic compliance approach will become even more important for companies.
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