Question about tax law (also some criminal and internet law)
January 28, 2010 | 50,00 EUR | answered by Bernhard Müller
I have a comprehensive question regarding tax, criminal, and internet law.
Let's imagine a German citizen is abroad and is the managing director of a limited liability company in that country. From there, he offers a service online that German companies could use for tax evasion. The necessary documents are delivered by post, but the entire transaction takes place abroad.
This service or action is subject to a four-digit fine in Germany.
So, if this action were legal in the foreign country but carried out online and by post with German companies, would it be considered legal or illegal? Could Germany prosecute the company under German law in a German court and demand extradition?
If so, would the managing director (a German citizen) in Germany also be vulnerable, or only the company based abroad? Would Germany have to take the case to court in the country where the company is based to sue? What could they sue for? Injunction or for a crime/aiding and abetting tax evasion?
Thank you in advance for a detailed response.
Dear inquirer,
According to § 9 I StGB, the crime is committed at any location where the result that constitutes the offense has occurred, or where the perpetrator intended it to occur. In the case of a crime committed on the internet, any location where internet access is available is considered the scene of the crime.
In the case of a crime committed through postal means, both the location of the sender and the location of the recipient are considered the scene of the crime.
Participation is considered to have taken place at any location where the participant has acted or where, according to their intentions, the crime was supposed to occur.
Therefore, Germany would be considered the scene of the crime for any participation. This is because the documents are sent to an address within the country and the internet page can be accessed within the country.
However, participation (instigation or aiding) must be related to a specific crime. The publication of general information on the internet that could be used for tax evasion may not be sufficiently specific in terms of the scene of the crime, time of the crime, perpetrator, and crime to be punishable as instigation or aiding.
It would be different if the information is specifically tailored to the recipient's circumstances and can only be accessed by them with a password. In that case, aiding may be present.
In the case of documents sent by post, there is no instigation if the sending is done at the request of the recipient. Because one cannot instigate someone who is already determined to commit the crime. However, aiding may still be present if tax evasion is facilitated or made possible by the sent documents.
It would be different if the German recipient company had a branch abroad, and the documents sent by post were only sent to this branch. Then Germany would not be the scene of the dispatch, and the sender would only be punishable under German law if the act is punishable under the law of the country where the branch is located.
Instigation may occur if the documents are sent unsolicited to a specific recipient in Germany and they use them for tax evasion.
If the act is punishable under German law, not only the GmbH but also the managing director acting on its behalf would be liable under § 14 I No. 1 StGB.
Therefore, the Federal Republic of Germany could take legal action against the managing director. To do so, they would have to send a request for legal assistance to the foreign country so that the managing director can be arrested and extradited there.
However, the foreign country is unlikely to comply with this request. Because the act is not punishable in that country.
The Federal Republic of Germany could file a lawsuit for injunction before the courts of the other state. However, this lawsuit would be dismissed because the act is not punishable in that state.
The managing director would have nothing to fear as long as he remains abroad.
However, if he re-enters the Federal Republic of Germany, there is a theoretical possibility that he may be arrested and placed in investigative custody for aiding tax evasion.
If the managing director intends to travel from the country where he currently resides to another country (third country), he should inquire with a colleague from the third country beforehand whether the act is punishable there and whether that country would extradite him to the Federal Republic of Germany.
I hope that my response has been helpful to you.
Best regards,
Bernhard Müller Lawyer
