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Limitation Period for Tax Fraud

When is the offence of tax fraud time-barred?

In light of the recently purchased CD’s containing data of tax offenders, we as attorneys for tax law and criminal tax law are frequently asked about the statute of limitation / time-barring / limitation period applicable for the offence of tax fraud. The press frequently mentions a 5 or 10 year limitation period, but it is not always clear which type of limitation period is meant and when it begins. Different limitation periods apply for criminal prosecution and taxation matters.

It is therefore important to distinguish two statutory limitation periods:

  • Limitation periods in criminal matters pertain to the question whether a tax fraud can still be prosecuted.
  • In tax assessment matters, the question is whether the Tax Authority can claim back taxes for certain periods or (amended) assessment notices are time-barred, based on the applicable limitation period for the respective year.

Advice on limitation periods for tax fraud: An accurate calculation of the limitation period for criminal prosecution is important for the completeness of a voluntary self-disclosure in cases of tax fraud. This is, because only a complete voluntary self-disclosure exempts from prosecution, if all other conditions are met. Completeness presupposes, that corrected tax returns are submitted for all periods which are not yet time-barred for criminal prosecution. The special significance of the limitation period applicable to tax assessments lies in the risk of being liable for the payment of back taxes. The longer the Tax Authority is able to issue amended tax assessments for past periods, the higher the back taxes payable, whereby the interest on arrears (6% p.a.) is particularly high.

1. Statute of limitation for criminal prosecution of tax fraud (§ 78 Abs. 1 StGB and § 370 Abs. 1 Tax Act (AO))

2. Limitation period for tax assessments (§§ 169, 170 AO)

3. Interest on unpaid taxes as set out in §§ 235, 208, 30 AO

4. Is a voluntary self-disclosure under § 371 AO helpful?

5. Limitation period for the enforcement of tax debt under § 228 AO

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