13 May Discussion with German Tax Experts on PROTAX Toolkits

Members of the PROTAX consortium held an online workshop with stakeholders from the German tax law community on the 4 May 2021 to critically analyse and discuss problems of investigation and prosecution of tax crimes and test the added value of the PROTAX toolkits for law enforcement in this domain.

The participants agreed that more effective inter-agency and cross-border cooperation among law-enforcement, tax and financial authorities could significantly improve the quality of prosecution and subsequent conviction. The federal structure of autonomous and independent financial authorities in Germany at the level of Bundesländer makes it difficult even within national jurisdiction to organise effective prosecution. The evaluation and organisational learning loop, as developed as a suggestion in the PROTAX Tool Kit (WP7) was considered as a valuable contribution that could add significantly to an improvement in the quality of law enforcement. This could help to better allocate and distribute the competences within the national eco-systems of law enforcement to achieve a better integrated case management in the prosecution of tax crimes.

Participants also highlighted the limits of criminal law as a tool that can be exploited by policy makers. Criminal law should be perceived as a means of last resort (ultima ratio) in the prosecution of tax crimes. A broad range of discretion regarding e.g. maximum sentences can have detrimental effects on the consistency of judicial practice and may lead to a strategic exploitation that runs counter to the normative principles of the rule of law.

It was agreed that a harmonisation of legal frameworks and definitions within the European Union (as highlighted by PROTAX findings) could substantially facilitate the prosecution of trans border criminal activities, also in the field of financial and tax crimes, as the case of VAT carousels amply demonstrated.

Dr Reinhard Kreissl, VICESSE