Today, German Finance Minister Lars Klingbeil and Justice Minister Dr Stefanie Hubig presented a joint action plan to help Germany prosecute tax crime and financial crime more rigorously. The focus of the plan is on more effective and better-connected financial and investigative authorities, the pooling of expertise and intelligence at the federal and Land levels, data analysis, and increasing deterrence and the risk of detection.

German Finance Minister Lars Klingbeil commented: “We can’t allow honest people to be punished for being honest. For this reason, we are taking steps to ramp up investigative pressure and detection risk in the fight against tax fraud. For us, it’s all about fairness. We can’t allow anyone who commits fraud against our state and our society to get away with it. We want higher penalties to apply in the future. Nobody should be able to buy their way out so easily by means of a voluntary disclosure.

“We are pooling government responsibilities and increasing operational effectiveness. To this end, we are establishing a new Joint Centre to Combat Tax Crime and Financial Crime within the customs administration. This will enable the close coordination of investigations by federal and Land authorities. A new data analysis centre will allow us to identify connections and patterns more quickly. AI will help us target our efforts precisely where the risk of fraud is greatest.”

German Justice Minister Dr Stefanie Hubig commented: “Tax crime harms us all. It undermines trust in the fairness of our democratic society. Citizens must be able to rely on the fact that rules apply to everyone. That’s why we must make progress in the fight against tax crime. The action plan outlines numerous measures to achieve this – including stiffer penalties and the effective recovery of illicit assets. One thing must be clear: we must make sure that tax crime doesn’t pay!”

Joint Centre to Combat Tax Crime and Financial Crime
A new Joint Centre to Combat Tax Crime and Financial Crime is to be established within the customs administration. Here, Land-level tax crime investigators and financial investigators from German customs will closely coordinate on important processes and share findings and expertise. The Joint Counter-Terrorism Centre (GTAZ) serves as a model for this collaborative approach. In this way, investigators can gain a comprehensive understanding of financial crime structures, patterns, and suspicious cases, working across Länder borders and sharing information with international partners. At the same time, this will also strengthen existing structures at both federal and Land levels. Additionally, federal competencies for tax investigations will be expanded.

Data analysis centre and AI-supported analysis of large datasets
To improve data analysis in the fight against tax crime, the tax administration will undergo further modernisation and digitalisation. A data analysis centre is to be established in cooperation with the Länder, and inter-agency data access will be made possible. Tax data will be consolidated on a central data platform.

AI-supported analysis tools will be developed to detect patterns in financial data. A VAT reporting system will be introduced to effectively combat VAT fraud. Retention periods for accounting records are to be increased to 15 years to ensure access to important evidence. Companies will be required to store tax-relevant data on mirror servers located in Germany. An obligation to use cash registers is being introduced (as set out in the coalition agreement) to prevent tax fraud in cash-intensive sectors.

Increasing the risk of detection and strengthening enforcement
Checks are to be expanded, the sentencing range for particularly serious cases of organised tax crime will be increased to up to 15 years of imprisonment, and serious tax offences will be punishable as crimes with a minimum prison sentence of one year. In addition, tools for investigating and seizing assets of dubious provenance are to be further developed, and federal audits are to be deployed in a more targeted way. The grey area of aggressive tax planning will also be further scrutinised in order to close legal loopholes. Training opportunities for tax court judges at the Federal Academy of Finance will be improved.

The proposed new definition of particularly serious cases of tax evasion as crimes carrying a minimum prison sentence of one year will also have practical implications for criminal proceedings. Crimes of this type cannot be dealt with in summary proceedings (section 407 of the Code of Criminal Procedure (Strafprozessordnung)), and proceedings cannot be discontinued under sections 153 or 153a of the Code of Criminal Procedure. These cases must be prosecuted, and cases must be heard in public court proceedings, provided the court admits the case for trial.

Federal audits follow a risk-based approach. This approach will be expanded through the use of better data as a basis. This reduces the burden on companies that follow the rules, allowing audits to focus on those businesses suspected of having committed tax offences. Tax simplifications through greater standardisation and the use of flat-rate arrangements will relieve the burden on taxpayers, particularly regarding tax returns, and will ease the workload for tax authorities as a result. This will also free up further resources for audit activities.

Stricter provisions for corporate tax evasion
Companies that evade taxes, thereby deliberately disregarding the law, will also face rigorous penalties. To this end, we plan to amend provisions concerning fines imposed on legal entities and associations, with the maximum limits for administrative fines to be raised in particular. This will also benefit the employees and shareholders of law-abiding companies. The systematic acquisition of data, and structures for the protection of whistleblowers, will be strengthened, so that tax avoidance can be uncovered at an early stage.

Abolition of exemption from punishment through voluntary disclosure in its current form
Under current law, prosecution can be waived under section 398a of the Fiscal Code (Abgabenordnung) even if a tax offence has been committed, if the taxpayer makes a voluntary disclosure and pays back the evaded taxes. Additionally, the taxpayer must pay a sum of 10–20% of the amount of tax evaded. The voluntary disclosure system creates the wrong incentives, encouraging individuals to disclose information only if they fear detection. Therefore, the option of gaining immunity from prosecution through voluntary disclosure is to be abolished in its current form.

Strengthening European and international cooperation
We want to strengthen the European Public Prosecutor’s Office. To this end, the competent authorities will work at EU level to make the European Public Prosecutor’s Office more effective and provide it with better financial resources. International cooperation will be intensified to block international escape routes used by tax criminals. Administrative cooperation on joint investigations at the European and international levels will be expanded. We will work to find new alliances and promote common standards.

Transparency and accountability
If companies are punished for serious tax offences, transparency about these offences should be ensured. The relevant information should be made publicly available, while respecting constitutional and data protection rules. In addition, a research-based approach to estimating the tax gap will be introduced, and empirical tax research will be systematically promoted.

Further measures by the federal government
This action plan is part of a range of additional measures being taken by the federal government to ensure tax fairness and to combat financial crime:

• The statutory powers of the customs administration’s special monitoring unit for undeclared work have been strengthened to effectively combat undeclared work and the exploitation of workers.
• The customs administration is being given additional staff, with approximately 1,500 additional positions available in 2026 alone.
• In February 2026, the Federal Ministry of Finance, together with the Federal Ministry of the Interior and the Federal Ministry of Justice and Consumer Protection, presented an action plan to combat organised crime, which also aims to intensify the fight against financial crime, particularly money laundering.
• The federal government is set to adopt the draft Customs Financial Justice Act (Zollfinanzgerechtigkeitsgesetz) within the federal cabinet in the near future. The new law, which is due to enter into force on 1 January 2027, will implement key components of the action plan against organised crime. The federal government is creating the powers that the customs administration requires to more effectively combat organised crime and financial crime, such as money laundering, and to enable the customs administration to enforce international sanctions.
• The new EU Anti-Money Laundering Authority (AMLA) has commenced its operations in Frankfurt. The fight against money laundering is a top priority for the EU and Germany. In an ambitious legislative package to combat money laundering and terrorist financing, the EU has not only harmonised anti-money laundering legislation across Europe, but has also established AMLA as the first-ever EU authority dedicated to fighting money laundering.