Germany - Consequences for incorrect filing of VAT returns
Submitting an incorrect VAT return can result in significant penalties, interest charges, and potential criminal consequences. Below are the implications based on the nature of the error.
1️⃣ Incorrect VAT Return Due to an Error ❌
📌 Steps to Follow:
- Correct the incorrect VAT return as soon as possible to minimize further complications.
- Audits will likely take place as part of the correction process.
- There may be additional assessments, including interest and penalties for the error.
📌 Potential Consequences:
- In some cases, the incorrect filing may be considered intentional, leading to tax evasion charges.
2️⃣ Intentional VAT Return Filing to Hide Transactions 🚨
📌 Extended Limitation Period:
- The limitation period for evading taxes is extended from 4 to 10 years.
📌 Consequences of Tax Evasion:
- The evaded taxes must be repaid, along with an additional 6% interest.
- The interest cannot be deducted from income tax.
- The company involved in tax evasion may face a ban from trading within the Federal Republic of Germany.
- Financial penalties will be imposed.
Imprisonment for up to 10 years is also a potential consequence.
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verified - 19.02.2025 - EA
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