Tax criminal law: what we as tax advisors may handle for you
Tax criminal law (Steuerstrafrecht) covers breaches of tax obligations, above all tax evasion under Section 370 of the German Fiscal Code (AO). Under Section 392(1) AO, tax advisors may act as defence counsel in these proceedings insofar as the tax authority conducts the proceedings independently — and that is the rule with voluntary disclosures and amended declarations. In all other cases we work together with a lawyer (Rechtsanwalt).
Legal position as of: 9 September 2026
What tax criminal law covers
Tax criminal law is not a separate code, but the part of criminal law that is regulated in the German Fiscal Code (Abgabenordnung). The core provision is Section 370 AO: tax evasion (Steuerhinterziehung). Anyone who provides the tax authorities with incorrect or incomplete information about facts relevant for tax purposes, or who, in breach of their duty, leaves them unaware of such facts and thereby understates taxes, fulfils the elements of the offence. What this means in detail is explained on our page on tax evasion under Section 370 AO.
Alongside it are three provisions that shape how the subject is dealt with in practice: reckless understatement of tax (leichtfertige Steuerverkürzung) under Section 378 AO, which is an administrative offence (Ordnungswidrigkeit) punished with an administrative fine; voluntary disclosure (Selbstanzeige) under Section 371 AO, which can lead to exemption from punishment under certain conditions; and Section 392 AO, which governs who may act as defence counsel.
The special feature of tax criminal law lies in the procedure. Unlike in general criminal law, the investigation here is often conducted not by the public prosecutor’s office (Staatsanwaltschaft) but by the tax authority itself — through the criminal and administrative fines unit (Straf- und Bußgeldsachenstelle) and the tax investigation service (Steuerfahndung). This structure also explains why tax advisors may play a role in these proceedings that would otherwise be closed to them.
For those affected, one distinction has particularly far-reaching consequences: alongside the criminal proceedings there are always the taxation proceedings, which are simply about the correct tax. The two follow different rules. In the taxation proceedings there are duties to cooperate; in the criminal proceedings nobody has to incriminate themselves. Anyone who treats the two as the same gives information in one set of proceedings that is used against them in the other — this is the most common avoidable mistake in the early phase.
How tax criminal proceedings work
Tax criminal proceedings run in three phases, which can differ greatly in length. Months, sometimes years, often pass between initiation and conclusion.
Initiation of proceedings
The trigger rarely comes out of nowhere. Typical triggers are irregularities in a tax audit, control notifications (Kontrollmitteilungen), group requests for information addressed to platforms (Sammelauskunftsersuchen) or data from the international exchange of information. The initiation is notified to the person concerned — and with this notification a voluntary disclosure is barred for the offences concerned.
From this point on, two sets of proceedings run in parallel: the taxation proceedings, which are about the correct tax, and the criminal proceedings, which are about the allegation. Each has its own rules — in the taxation proceedings there are duties to cooperate, in the criminal proceedings the principle applies that nobody has to incriminate themselves. How far back both can reach is explained on our page on the limitation period for tax evasion.
Searches and the tax investigation service
The tax investigation service usually arrives with a search warrant issued by a judge. It specifies what may be searched for and to what extent — it is worth taking a look at it before anything is handed over. Documents, computers and data carriers can be seized.
The persons concerned are obliged to tolerate the search. They are not obliged to incriminate themselves or to answer questions on the matter. Keeping both apart at the same time is difficult in this situation — which is why the most important practical recommendation is to contact an advisor early and to make no statements on the matter until then.
In North Rhine-Westphalia, the tax investigation service has now been brought together in the State Office for Combating Financial Crime (Landesamt zur Bekämpfung der Finanzkriminalität NRW). What this means for taxpayers in Düsseldorf is explained under tax criminal law in Düsseldorf. How such a wave of investigations unfolds in practice is shown by the case of the investigations into influencers involving 300 million euros (in German).
Conclusion: discontinuation, penalty order, indictment
At the end there is one of three outcomes. Discontinuation may be considered if the suspicion is not confirmed, if the limitation period has expired or if the requirements of an effective voluntary disclosure are met. Above €25,000 per offence, prosecution may be dispensed with under Section 398a AO if taxes, interest and the graduated surcharge are paid on time.
The penalty order (Strafbefehl) is the most common conclusion in manageable cases; it is issued without a main trial, and an objection can be lodged against it. An indictment follows if the matter remains disputed or the weight of the allegations requires a trial. Which range of punishment applies is explained on our page on penalties for tax evasion.
Lawyer or tax advisor — who does what?
The question is justified and is rarely answered clearly. It can be broken down, because a tax criminal mandate consists of two parts of work that require different qualifications: the tax investigation and the criminal law assessment.
Who takes on which task in a tax criminal mandate. The allocation follows the interpretation of Section 392(1) AO and the practical division of work; it is not a quotation from the law.
| Task | Who takes it on |
|---|---|
| Preparing records and transaction data | Tax advisor |
| Determining and calculating the tax bases | Tax advisor |
| Preparing and filing the amended declaration | Tax advisor |
| Correspondence with the tax office in the tax matter | Tax advisor |
| Reviewing amended tax assessments, appeals in the taxation proceedings | Tax advisor |
| Defence as long as the tax authority conducts the proceedings independently | Tax advisor (Section 392(1) AO) |
| Criminal law assessment of the risk situation | Lawyer |
| Communication with the criminal and administrative fines unit | Lawyer |
| Defence in court | Lawyer |
| Defence once the public prosecutor’s office conducts the proceedings | Lawyer, tax advisor only jointly with the lawyer |
Section 392 AO: defence by tax advisors
The provision on which this division is based reads:
“By way of derogation from Section 138(1) of the Code of Criminal Procedure, tax advisors, tax agents, public auditors and sworn auditors may also be chosen as defence counsel insofar as the tax authority conducts the criminal proceedings independently; otherwise they may conduct the defence only jointly with a lawyer or a law lecturer at a German university within the meaning of the Framework Act for Higher Education who is qualified to hold judicial office.”
Section 392(1) AO (unofficial translation)
The decisive part is the clause “insofar as the tax authority conducts the criminal proceedings independently”. That is exactly the rule with voluntary disclosures and amended declarations. If the matter passes to the public prosecutor’s office, the roles shift — the lawyer then takes the lead, and the tax advisor continues to work together with him.
Do I need a certified specialist lawyer?
The title of certified specialist lawyer (Fachanwalt) is an additional designation awarded by the regional bar association (Rechtsanwaltskammer). Anyone holding it has demonstrated special theoretical knowledge and practical experience in a particular field of law — in tax law, for example, through a specialist lawyer course and a minimum number of cases handled. The title is protected; only those to whom it has been awarded may use it.
It is not required for tax criminal proceedings, nor is it a reliable selection criterion. In practice, what matters is who has a command of the specific facts. With an amended declaration covering several years, well over 90 per cent of the effort lies in the tax investigation work — for which the tax qualification is the decisive one. How the roles of lawyer and tax advisor are divided in practice is set out for crypto matters in Lawyer or tax advisor — who does what? (in German).
For the sake of completeness, because people often search for it: we are a tax advisory firm (Steuerberatungsgesellschaft) and do not hold the title of certified specialist lawyer. The lawyer with whom we work on tax criminal mandates holds an LL.M. in Business Criminal Law and likewise does not hold the title of certified specialist lawyer. We consider it more appropriate to say so than to advertise with a title that nobody here holds. Who he is and what he works on is set out in When Blockchain Meets Crime (in German).
Voluntary disclosure as a way out of proceedings
The most common way of preventing tax criminal proceedings from arising in the first place is a voluntary disclosure under Section 371 AO. It can lead to exemption from punishment if it is complete, no exclusion ground (Sperrgrund) applies and the taxes, together with interest on evaded taxes under Section 235 AO and interest under Section 233a AO, are paid on time.
Timing is everything here. Once an audit order has been notified, the initiation of proceedings has been notified or the offence has been discovered, the route is closed. Anyone considering whether a voluntary disclosure is an option for them should have this checked before any of these events occurs.
Requirements, exclusion grounds, process and costs are set out in detail on our page on voluntary disclosure to the tax office.
What we as tax advisors may handle
As tax advisors, we may represent you as defence counsel in tax criminal proceedings insofar as the tax authority conducts the proceedings independently — and that is the rule with voluntary disclosures and amended declarations. On top of this comes all the tax work: data preparation, determining the tax bases, the amended declaration, correspondence with the tax office. In crypto matters, this is handled by our team of tax advisors and blockchain analysts.
On tax criminal mandates we work in two clearly separated roles.
The tax side
Maximilian Klein, tax advisor (Steuerberater), is responsible for preparing the records and transaction data, determining the tax bases, calculating the amounts to be declared retrospectively and correspondence with the tax office in the tax matter. In crypto matters, this is handled by our team of tax advisors and blockchain analysts.
The criminal law side
Thorsten Franke-Roericht — lawyer (Rechtsanwalt), LL.M. in Business Criminal Law, Certified Crypto Finance Expert (CCFE, Zurich), Of Counsel to Steuerberatungskanzlei Klein GmbH. Focus areas: tax criminal law, business criminal law and crypto crime. Author in the Heidelberger Kommentar Steuerstrafrecht and in Praxis Steuerstrafrecht (PStR). He is responsible for the criminal law side: assessing the risk situation, communicating with the criminal and administrative fines unit and, where necessary, the defence.
This separation is not a formality but follows from Section 392 AO — and it is the reason why, with us, both sides sit at one table instead of working one after the other. Who is behind this in detail is shown on our team page.
When a lawyer comes in
Three situations shift the weight from the tax side to the criminal law side. First, when the public prosecutor’s office takes over the proceedings — the second half of the sentence in Section 392(1) AO then applies. Second, when an indictment is brought and a defence is conducted at a main trial. Third, when other offences are at issue in addition to the tax allegation.
In all three cases it is not the mandate that changes but who takes the lead. The tax work continues, because without it the criminal law assessment has no basis either: whether an allegation holds up depends on the amount of tax understated, and that is only established once the tax bases have been determined.
In practice this also means that the change should not come as a surprise. Anyone who has filled both roles from the outset does not need to bring a new advisor up to speed at the transition — and the transition itself is not a setback but a procedural step.
Conversely: criminal law representation from the outset is not the safer route in every case. Where the tax authority conducts the proceedings independently and the focus is on an amended declaration, it shifts effort to a level at which the actual work does not take place at all.
Focus on crypto: tax criminal law and blockchain
In tax criminal law, crypto matters are a craft of their own. The transactions are spread across exchanges, wallets and protocols, many of which no longer exist, and a considerable proportion of the taxable events are not even recognised as such by those concerned — swapping one currency for another, for example. Anyone who wants to determine the tax bases here needs, in addition to tax law, the ability to trace transaction chains on the blockchain.
We have exactly this combination at one location: tax advisors and blockchain analysts work in the same team, and the criminal law assessment is carried out by a lawyer whose focus areas expressly include tax criminal law and crypto crime.
On how to proceed with undeclared crypto gains, see crypto voluntary disclosure; on the time pressure arising from the reporting obligation of trading platforms, see DAC8 and the reporting obligation.
Frequently asked questions about tax criminal law
The questions we are asked most often about tax criminal proceedings and defence.
What is tax criminal law?
Tax criminal law is the part of criminal law that covers breaches of tax obligations. The core provision is Section 370 AO, tax evasion. Alongside it are reckless understatement of tax as an administrative offence under Section 378 AO and voluntary disclosure under Section 371 AO, which can lead to exemption from punishment under certain conditions. In procedural terms, a special feature is that the tax authority conducts the criminal proceedings independently in many cases.
When does tax evasion become a criminal offence?
As soon as the elements of the offence under Section 370(1) AO are met: anyone who provides the tax authorities with incorrect or incomplete information about facts relevant for tax purposes, or who, in breach of their duty, leaves them unaware of such facts and thereby understates taxes. The law does not set a minimum amount. If there is no intent and only recklessness, it is an administrative offence under Section 378 AO.
May a tax advisor act as defence counsel in tax criminal proceedings?
Yes, within the scope defined by Section 392(1) AO. Tax advisors, tax agents, public auditors and sworn auditors may be chosen as defence counsel insofar as the tax authority conducts the criminal proceedings independently. In all other cases they may only conduct the defence jointly with a lawyer or a law lecturer qualified to hold judicial office.
Do I need a certified specialist lawyer for tax law?
The title of certified specialist lawyer (Fachanwalt) attests to theoretical knowledge and practical experience in a field of law; it is awarded by the regional bar association (Rechtsanwaltskammer). For tax criminal proceedings it is neither required nor meaningful on its own — what matters is who has a command of the specific facts. With an amended declaration, the focus is also on the tax investigation work, for which a tax qualification is the decisive one.
What happens during a search by the tax investigation service?
The tax investigation service (Steuerfahndung) usually arrives with a search warrant issued by a judge that defines the subject matter and scope of the search. Documents and data carriers can be seized. Once the initiation of proceedings has been notified, a voluntary disclosure is barred for the offences concerned. The persons concerned are obliged to tolerate the search, but not to incriminate themselves.
When are tax criminal proceedings discontinued?
Discontinuation may be considered if the suspicion is not confirmed, if the offence is time-barred or if the requirements of an effective voluntary disclosure under Section 371 AO are met. Above the threshold of €25,000 per offence, prosecution may be dispensed with under Section 398a AO if taxes, interest and the graduated surcharge are paid on time.
What does a defence in tax criminal proceedings cost?
The tax work — preparing the records, determining the tax bases, the amended declaration, correspondence with the tax office — is governed by the German Tax Advisors’ Fees Regulation (Steuerberatervergütungsverordnung) and depends on the work involved, above all on the number of years and the state of the data. The lawyer’s fees for the criminal law side are agreed separately. These must be distinguished from taxes, interest and any surcharge under Section 398a AO.
About the author
Maximilian Klein — Tax Advisor (Steuerberater) & Founder
Tax advisor (Steuerberater) focusing on voluntary disclosures and tax criminal matters, particularly involving crypto assets.
Note: This page reflects the legal position as of 9 September 2026 and does not constitute advice on your individual case. Whether and in what form action is required and which route is the right one depends on the specific transactions and documents and requires them to be reviewed.
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