What penalty applies to tax evasion?
For tax evasion (Steuerhinterziehung), Section 370(1) of the German Fiscal Code (AO) provides for a criminal fine or imprisonment of up to five years, and in particularly serious cases under Section 370(3) AO imprisonment from six months to ten years. There is no statutory allocation of amounts evaded to specific penalties: sentencing is a decision the court makes on the individual case under Section 46 of the German Criminal Code (StGB). In addition, the tax must always be paid back together with interest on evaded taxes (Hinterziehungszinsen).
Legal position as of: 9 September 2026
Penalty range under Section 370 AO
In tax criminal law, a penalty range is the span within which the court may set the specific penalty. It says nothing yet about where within that span a case will land — only which limits apply.
For the basic offence, Section 370(1) AO provides for imprisonment of up to five years or a criminal fine. The two types of penalty rank equally; in manageable cases, the criminal fine is the norm.
For particularly serious cases, Section 370(3) AO shifts the range significantly upwards: imprisonment from six months to ten years. A criminal fine is thus no longer an option, and the minimum is already six months.
Alongside this is reckless understatement of tax (leichtfertige Steuerverkürzung) under Section 378 AO. It is not a criminal offence but an administrative offence (Ordnungswidrigkeit) punished with an administrative fine (Geldbuße). Where the line between intent and recklessness is drawn is explained on our page on tax evasion under Section 370 AO.
Sentencing by the amount evaded
First of all, because it is the most searched-for question on this page: there is no statutory table of “amount evaded → penalty”. Sentencing is a decision the court makes on the individual case; the law knows no fixed amount brackets. The overviews circulating online are informal guide values, differing from region to region, taken from the practice of individual public prosecutor’s offices (Staatsanwaltschaften) — they do not bind any court. We therefore do not publish them: on the website of a tax firm they would create an appearance of being binding that they do not have.
What can reliably be put into a table is the statutory penalty range:
The statutory penalty range for tax offences, by type of case and legal basis.
| Case | Legal basis | Penalty range |
|---|---|---|
| Tax evasion, basic offence | Section 370(1) AO | Criminal fine or imprisonment of up to five years |
| Particularly serious case | Section 370(3) AO | Imprisonment from six months to ten years |
| Statutory examples of a particularly serious case | Section 370(3) sentence 2 nos. 1–6 AO | including “on a large scale” (in großem Ausmaß) — with no statutory amount |
| Reckless understatement of tax | Section 378 AO | Administrative offence, administrative fine |
On the statutory example “on a large scale”: the law names it without setting an amount. Where the threshold lies in an individual case is a matter for case law and the specific circumstances — and precisely the point at which an assessment becomes necessary. Stating a figure would suggest a precision that does not exist.
The amount evaded is therefore not irrelevant — it is one of the weightiest sentencing factors. It is just not a machine from which a penalty could be read off.
Criminal fines: how daily rates are calculated
A criminal fine is not imposed as a round total amount but in daily rates (Tagessätze). To do so, the court determines two figures separately — and this method explains why two people can pay very different amounts for the same offence.
Number of daily rates
Reflects the seriousness of the offence: amount of tax understated, duration, degree of planning, previous convictions, conduct after the offence. This is sentencing proper.
Amount of one daily rate
Based on personal and financial circumstances, essentially on net income. It has nothing to do with the seriousness of the offence.
The amount payable is the product of the two. Anyone looking for a fixed criminal fine for a particular amount evaded is therefore looking for a figure that cannot exist: one half of the calculation depends on income.
The statutory limits of the daily rate system under Section 40 StGB.
| Figure | Range | Source |
|---|---|---|
| Number of daily rates | at least 5, at most 360 | Section 40(1) sentence 2 StGB |
| Amount of one daily rate | at least €1, at most €30,000 | Section 40(2) sentence 3 StGB |
| For several offences in an aggregate sentence | at most 720 daily rates | Section 54(2) sentence 2 StGB |
For the amount of a daily rate, under Section 40(2) sentence 2 StGB the court generally takes as its starting point the net income that the offender has, or could have, on average per day.
At least as important in practice is a threshold for the certificate of good conduct (Führungszeugnis): a conviction to a criminal fine of no more than 90 daily rates is not included in the certificate of good conduct if no other sentence is entered in the register (Section 32(2) no. 5 of the Federal Central Criminal Register Act (BZRG)). For some professions, this is the really burdensome question — not the amount of money.
This threshold has two limitations that are rarely mentioned. First, it only applies if no other sentence is entered in the register. Second, it does not apply to the certificate of good conduct for authorities (Führungszeugnis für Behörden): under Section 32(4) BZRG, such convictions must nevertheless be included there if the offence was committed in or in connection with the pursuit of a trade or the operation of another economic enterprise. For business-related tax offences, this is the case that matters in practice.
When imprisonment may be imposed
Here too: the law does not set an amount above which a prison sentence must be imposed. What it does set out are the statutory examples of a particularly serious case — and in these cases a criminal fine is no longer an option, because Section 370(3) AO sets a minimum of six months’ imprisonment.
A prison sentence that has been imposed does not have to be enforced. The Criminal Code provides for suspension on probation (Bewährung) if there is a favourable social prognosis. Relevant factors include personality, previous history, conduct after the offence and the effect that can be expected from a suspension. In tax offences, full payment of the tax owed plays a recognisable role in this.
The second lever is the limitation period. In particularly serious cases, Section 376(1) AO extends the limitation period for criminal prosecution to fifteen years — so classification as particularly serious does not only affect the penalty. More on this on our page on the limitation period for tax evasion.
Section 56 StGB draws two limits here. A prison sentence of no more than one year is suspended on probation if it can be expected that the conviction will serve as a warning to the offender and that they will not commit any further offences even without enforcement (Section 56(1) StGB). For a sentence of more than one but no more than two years, suspension is only possible if, after an overall assessment of the offence and the offender’s personality, special circumstances exist (Section 56(2) StGB).
That payment of the tax owed counts is expressly stated in the law: under Section 56(2) sentence 2 StGB, this decision must take into account “in particular also the efforts of the convicted person to make good the damage caused by the offence” (unofficial translation). This applies regardless of whether a voluntary disclosure (Selbstanzeige) could still have led to exemption from punishment.
Above two years, the law does not provide for suspension on probation. In practice, this makes the two-year limit the most important threshold of the entire proceedings — and it explains why the amount of tax understated and everything with a mitigating effect are negotiated so carefully.
What influences the outcome
Section 46 StGB sets out the principles of sentencing. The basis is the offender’s guilt; the effects that the penalty can be expected to have on their future life must be taken into account. This gives rise to the factors that actually make the difference in tax criminal proceedings:
- Amount of tax understated. The weightiest single factor — but still a factor, not a formula.
- Duration and degree of planning. A system built up over years weighs more heavily than a one-off omission.
- Conduct after the offence. A confession, cooperation in clearing up the matter and, above all, full payment of the tax owed have a mitigating effect.
- Previous convictions. A first offence without previous convictions generally has a mitigating effect.
- Motives and aims. Financial hardship is weighted differently from pure greed.
- Length of proceedings. Excessively long proceedings for which the person concerned is not responsible can have a mitigating effect.
It is striking how many of these factors can be influenced — namely by what happens after the offence. That is precisely where the practical value of an orderly, complete review of the facts lies.
What comes on top of the penalty
In many cases the penalty is not the largest item. Two groups of consequences arise independently of it.
Back payment and interest on evaded taxes
The tax understated must be paid back in full — this is not a penalty but the tax that was owed from the outset. In addition, there is interest on evaded taxes (Hinterziehungszinsen) under Section 235 AO and interest under Section 233a AO.
Because the assessment period (Festsetzungsfrist) under tax law is ten years for tax evasion and in effect reaches further back because of the deferred commencement (Anlaufhemmung), tax and interest add up over a long period. In practice, this sum often significantly exceeds the criminal fine.
Consequences under professional law and civil service law
In professions with their own chamber or a special duty of loyalty, a conviction for tax evasion can lead to proceedings under professional law — for civil servants, disciplinary proceedings may be brought, which run independently of the criminal proceedings.
For people in these professions, the decisive question is therefore often not the level of the penalty but whether there is a conviction at all. This shifts the assessment of every option for action — and makes an early assessment more important than elsewhere.
How a voluntary disclosure changes this
The most effective influence on the penalty is that no penalty is imposed at all. An effective voluntary disclosure (Selbstanzeige) under Section 371 AO is a personal ground for exemption from punishment (persönlicher Strafaufhebungsgrund): it can lead to exemption from punishment if it is complete, no exclusion ground (Sperrgrund) applies and the taxes and interest are paid on time.
Above €25,000 per offence, exemption from punishment under Section 371 AO no longer applies. Section 398a AO takes its place: prosecution is dispensed with if, in addition to taxes and interest, a surcharge is paid to the state treasury — 10 percent up to €100,000, 15 percent up to €1,000,000 and 20 percent above that.
And even if a voluntary disclosure is no longer possible, a complete review of the facts remains a sentencing factor: a confession, cooperation and payment of the tax owed have a mitigating effect under Section 46 StGB.
Requirements, exclusion grounds, process and costs are covered in detail on our page on voluntary disclosure to the tax office.
Frequently asked questions about penalties
The questions we are asked most often about penalties and sentencing for tax evasion.
From what amount does tax evasion lead to prison?
The law does not set an amount above which a prison sentence must be imposed. Section 370(1) AO provides for a criminal fine or imprisonment of up to five years, and Section 370(3) AO provides for imprisonment from six months to ten years in particularly serious cases. Whether a prison sentence is imposed is a decision the court makes on the individual case under Section 46 StGB. The tables of amounts circulating online are not legal rules.
How high is the criminal fine for tax evasion?
A criminal fine is not imposed as a total amount but in daily rates (Tagessätze). The court determines two figures separately: the number of daily rates, which reflects the seriousness of the offence, and the amount of one daily rate, which is based on personal and financial circumstances — essentially on net income. Two people can therefore pay very different amounts for the same offence.
What happens with a first-time tax evasion offence?
A first offence without previous convictions generally has a mitigating effect in sentencing under Section 46 StGB, as do a confession and full payment of the tax owed. However, there is no separate penalty range for first-time offenders. In manageable cases, proceedings often end with a penalty order (Strafbefehl), i.e. without a main trial; discontinuation of proceedings is also possible.
Can a prison sentence be suspended on probation?
Yes, the Criminal Code provides for the enforcement of a prison sentence to be suspended on probation (Bewährung) if there is a favourable social prognosis. Relevant factors include personality, previous history, conduct after the offence and the effect that can be expected from a suspension. In tax offences, full payment of the tax owed plays a recognisable role in this.
How does a voluntary disclosure affect the penalty?
An effective voluntary disclosure (Selbstanzeige) under Section 371 AO can mean that no penalty is imposed at all — it is a personal ground for exemption from punishment. The requirements are completeness, the absence of an exclusion ground (Sperrgrund) and payment on time. Above €25,000 per offence, Section 398a AO takes its place: prosecution is dispensed with if a surcharge of 10, 15 or 20 percent is paid in addition.
What does tax evasion cost overall?
In addition to the penalty, there is always the tax to be paid back and interest on evaded taxes under Section 235 AO, plus interest under Section 233a AO. For a voluntary disclosure above the threshold, the surcharge under Section 398a AO is added, which is not refunded if the legal consequence does not occur after all. On top of that come the costs of the proceedings and of advice — and, in some professions, consequences under professional law.
About the author
Maximilian Klein — Tax Advisor (Steuerberater) & Founder
Tax advisor (Steuerberater) focusing on voluntary disclosures and tax criminal matters.
Note: This page reflects the legal position as of 9 September 2026 and does not constitute advice on your individual case. Sentencing is a decision for the court; what consequences are to be expected in a specific case depends on the specific circumstances and requires them to be reviewed.
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