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By Dr. Katharina Wild (www.wild.legal/anwaeltin)

Yes, a tax advisor can be held criminally liable as a perpetrator, accomplice, instigator, or accessory to tax evasion committed by their client. Mere knowledge of the tax evasion or simply remaining silent is generally insufficient. The decisive factor is whether the advisor intentionally facilitates the offense, provides incorrect information to the tax office themselves, or, in exceptional cases, violates their own tax-related duty of care.

I. When is a tax advisor criminally liable?

1. Perpetration

Section 370 of the German Fiscal Code (AO) is not a special offense that only taxpayers can commit. A tax advisor can also be a perpetrator, for example, if they knowingly provide incorrect or incomplete information to the tax authorities on their own responsibility. Joint perpetration is also conceivable if the advisor and client collaborate based on a shared plan.

Typical cases:

• knowingly submitting false tax returns or declarations,

• deliberately asserting incorrect facts to tax auditors or tax investigation authorities,

• claiming fictitious transactions or non-existent business expenses for tax purposes,

• deliberately concealing assets or income in a settlement agreement,

• using backdated contracts or falsified documents.

Tax evasion can be committed for the benefit of the client; personal enrichment of the advisor is not required. Section 370 of the German Fiscal Code (AO) is relevant.

2. Aiding and abetting

The most frequent charge in practice is aiding and abetting under Section 27 of the German Criminal Code (StGB). The following are required:

• intentional tax evasion by the client,
• an objectively facilitating contribution by the tax advisor, and
• at least conditional intent regarding the principal offense and the facilitation.

Even activities typical of the profession are not automatically neutral.

According to principles developed by case law:

If the advisor knows that their services are intended to be used specifically for tax evasion, even the ordinary preparation of a tax return can constitute aiding and abetting.

If they only consider unlawful use to be a possibility in the abstract, this is usually insufficient.

However, if the perceived risk is so high that the activity practically only appears to be supporting a client who is demonstrably prone to committing a crime, conditional intent may be present.

3. What is regularly insufficient

The following are generally insufficient:

• mere knowledge of a completed tax evasion,
• mere attendance at a meeting,
• a purely abstract suspicion,
• reliance on plausible client statements without any discernible warning signs,
• reference to the legal situation or a legal alternative,
• truthful information about the risks of detection – as long as this does not result in concrete instructions for concealment.

However, after the discovery of the offense, new crimes can arise through active concealment measures, in particular aiding and abetting, obstruction of justice, or a new tax evasion.

4. Further Consequences

In cases of intentional involvement, in addition to criminal penalties, the following are particularly likely:

• personal liability for the evaded taxes and interest on arrears pursuant to Section 71 of the German Fiscal Code (AO),

• professional disciplinary measures,

• claims for damages,

• loss of insurance coverage in cases of intentional conduct,

• search of the law firm and loss of protection against seizure,

• conflict of interest with the client.

II. What do I do with clients who refuse advice?

Resistance to advice is not automatically a criminal offense. The crucial factor is whether the client simply holds a different legal opinion or whether they intend to make false or incomplete statements.

A sound approach is as follows:

• Clarify the facts completely.

• Specifically inquire about contradictions, missing documents, and unclear payment flows.

• Clearly explain the legal situation and risks.

• Do not just issue general warnings, but specify which statements would be incorrect and what obligation to correct or clarify exists.

• Document the consultation.

• Record the conversation notes, requested documents, the client's response, and the recommendation given. However, the documentation must not be falsified as a subsequent "self-exoneration."

• Do not submit any incorrect statements.

• Do not sign, send electronically, or accept any demonstrably unreasonable estimate.

• Recommend correction or a tax-related criminal investigation.

Before making a hasty declaration under Section 153 of the German Fiscal Code (AO), it must be clarified whether a mere error, negligence, or intent is involved, and whether a voluntary disclosure under Section 371 AO is necessary.

1. Set a clear deadline.

The client must submit any missing information or documents and declare their compliance with the lawful procedure.

Limit or terminate the mandate.

Terminating the mandate is not automatically required under criminal law for every past transgression. However, it is generally necessary if the client demands the submission of further false declarations or if a lawful continuation of the mandate is no longer possible.

2. Engage independent legal counsel if you have prior involvement.

If the tax advisor participated in the declarations in question, the interests of the client and advisor may diverge. The previous advisor should then not simultaneously assess their own role and represent the client.

Important: The tax advisor is generally not permitted to unilaterally report the client to the tax office. The duty of confidentiality and Section 203 of the German Criminal Code (StGB) remain in effect. The risk of personal criminal liability is resolved through individual legal counsel, not through the spontaneous disclosure of client secrets.

III. When is there a particularly high risk?

| Situation | Risk for the tax advisor |

| :------- | -------: |

| Client explicitly announces that they will not declare income | Further cooperation could constitute aiding and abetting |

| Repeatedly missing or contradictory documents | Conditional intent or recklessness becomes easier to substantiate |

| Tax advisor is aware of errors from previous years and repeats them | Particularly high risk because the prior knowledge continues to have an effect |

| Own estimate "out of the blue" | Risk of an incorrect declaration |

| Backdated contracts or subsequently generated documents | Typical concrete warning signs |

| Fictitious invoices, double-entry bookkeeping, unrecorded cash transactions | Risk of favoritism, obstruction of justice, and forgery |

| Incorrect statements to auditors or investigators | Further tax evasion by the client is possible |

The tax advisor was responsible for the disputed accounting and is now tasked with defending himself | Risk of self-incrimination and seizure |

One particularly risky statement from the client went something like this: "You know how it really was – just do it the same way as always." From this point on, the advisor can hardly rely on good faith.

IV. Offshore Companies

An offshore company is neither prohibited nor automatically an indication of tax evasion. However, it does lead to increased scrutiny.

Critical points include, in particular:

• actual management is based in Germany,
• the foreign managing director is merely a figurehead,
• no personnel or material substance,
• the beneficial owner is being concealed,
• foreign accounts or distributions are not declared,

fictitious consulting, license, or loan agreements,

inappropriate transfer prices,

undeclared shareholdings or foreign transactions,

potential controlled foreign company (CFC) rules under Sections 7 et seq. of the German Foreign Tax Act (AStG),

reporting obligations for foreign transactions and, where applicable, cross-border tax arrangements.

A cross-border arrangement may also fall under the reporting obligations of Sections 138d et seq. of the German Fiscal Code (AO).

The risk of criminal prosecution doesn't begin with the term "offshore," but rather when the advisor recognizes that the company is merely intended to create a false tax reality.

Statements like the following are particularly dangerous:

"On paper, the management is based in Dubai."

"The nominee director signs everything, but the decisions are made in Munich."

"The account shouldn't appear in the financial statements."

"We still need a contract that explains the previous payments."

In these cases, a client's declaration of completeness is not sufficient as a license to act. The advisor must not deliberately ignore specific warning signs.

V. Is there a duty of care to prevent a client from committing tax evasion?

Generally, no.

The mere fact of being a tax advisor does not create a criminal duty of care under Section 13 of the German Criminal Code (StGB) to prevent all tax evasion by the client. Section 153 of the German Fiscal Code (AO) also generally applies to the taxpayer, their legal successor, and persons acting under Sections 34 and 35 AO – not to the tax advisor who is usually authorized to act on their behalf. The advisor must regularly inform the client of the obligation to correct their tax returns, but is not thereby obligated to disclose the information to the tax office themselves.

Exceptions may exist if the tax advisor:

• is a legal representative within the meaning of Section 34 AO,
• acts as an authorized representative under Section 35 AO,
• independently provides false information to the tax office,
• participates in the tax evasion based on a joint plan.

A duty of care arising from prior breach of duty – for example, if the advisor himself negligently caused an incorrect declaration – is controversial. The Federal Chamber of Tax Advisors rejects such an unwritten criminal duty of care with compelling arguments, because it would undermine the conclusive regulation of Section 153 of the German Fiscal Code (AO) and the duty of confidentiality. However, the civil law obligation to inform the client of errors and the need for correction remains.

VI. When can a client file be seized?

The term "client file" is not decisive. The professional client file under Section 66 of the German Tax Advisory Act (StBerG) is not identical to the protection against seizure under Section 97 of the German Code of Criminal Procedure (StPO).

The following are generally protected in the possession of the tax advisor:

• Correspondence between the accused client and the advisor,
• Notes of conversations and telephone calls concerning confidential information,
• The advisor's own client-related records,
• Unapproved drafts and work results,
• Documents handed over for the preparation of a voluntary disclosure or defense,
• Relevant emails and electronic files.

The following are frequently subject to seizure or at least subject to dispute:

• Original receipts and accounting records,
• Contracts and general business documents,
• Final annual financial statements and tax returns approved by the client,
• Tax assessments,
• Documents that were handed over for safekeeping only.

Electronic data is generally not less protected than paper documents. However, a larger dataset may initially be secured for review pursuant to Section 110 of the German Code of Criminal Procedure (StPO) if on-site separation is technically impossible. Therefore, a clear separation between client files, internal case files, voluntary disclosure files, and criminal files is particularly important.

Protection may be forfeited, in particular, if:

• the client effectively releases the tax advisor from confidentiality,
• the tax advisor is specifically suspected of involvement in the offense, aiding and abetting, or obstructing justice,
• the items constitute instruments or products of the offense,
• there is no protected client relationship.

VII. Special Considerations for Searches of Tax Offices

If only the client is a suspect, the search of the office is generally governed by Section 103 of the German Code of Criminal Procedure (StPO). In this case, there must be concrete evidence that specific items being sought are located in the office. If the tax advisor is also a suspect, Section 102 StPO applies; the threshold for intervention is lower. For those bound by professional secrecy, the principle of proportionality must be examined particularly rigorously. Sections 103 StPO, 160a StPO

Immediate Measures

Remain calm and do not delete, alter, or create anything retroactively. Check and copy official identification and the search warrant. Clarify who is a suspect and what offense, time periods, clients, and items are covered. Immediately consult your own independent tax defense attorney. Designate a responsible contact person within the office. Instruct employees not to make any statements regarding the content of the search and not to hand over anything voluntarily. Accompany the investigators; avoid unsupervised searches if possible. Separate protected and unprotected documents. In case of dispute regarding the seizure, demand sealing or separate storage and a judicial decision. Have any objection to the removal documented in the record. Ensure that all files, data carriers, directories, and copies are individually recorded. Do not initiate any spontaneous release from the duty of confidentiality. Do not release passwords or comprehensive system access credentials without verification; first clarify the suspect status, the scope of the warrant, and the duty to cooperate. Request copies necessary for business operations and the return of required documents as quickly as possible. Voluntary surrender is particularly problematic: In such cases, there may be no seizure, thus complicating judicial review. You can present the requested files to limit the scope of the search, but you should not readily consent to their removal.

For electronic data, the following should be documented:

• which systems were searched,
• which search terms were used,
• which directories were copied,
• which clients are affected,
• whether data of uninvolved clients was recorded,
• whether privileged files or defense files are included.

The Federal Constitutional Court has emphasized that courts must specifically address the prohibition of seizure under Section 97 of the Code of Criminal Procedure; a mere general suspicion of involvement by the tax advisor is insufficient. Federal Constitutional Court, Decision of November 30, 2021 – 2 BvR 2038/18

The most important principle is:

The tax advisor is neither obligated to prevent their client's tax evasion nor to act as a provider of evidence. However, from the moment they acquire concrete knowledge of the offense, they may not contribute to it further.

If you have any questions, please contact us: kanzlei@wild.legal