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German State Mulls Purchase Of Stolen Tax Data


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Dec 29, 2008
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The appearance of a new tax data disc, reportedly containing company information, has once again served to provoke disagreement within the coalition government in the German state of Baden-Württemberg. While standing firm on its insistence that purchasing illegally obtained data is not legally justifiable, the state government has, nevertheless, also revealed its willingness to examine sample data.

Baden-Württemberg’s finance ministry has recently been offered data concerning 250 German firms, alleged to have evaded in the region of EUR800m in taxes. According to reports, the majority of the companies involved are believed to be active in the telecommunications and real estate sectors in Germany.

Confirming plans to scrutinize the tax data contained on the disc, Baden-Württemberg’s Finance Minister Willi Stächele also made clear that the state government would not purchase the data if a decision to do so resulted in legal repercussions.

Opposition parties have fiercely criticized the German state for merely making excuses, arguing that ruling out the purchase of the disc would be tantamount to actively supporting tax evasion within the state and would once again fail honest taxpayers.

In June, Germany’s federal coalition government announced its decision to jointly purchase with the federal state of Lower Saxony a stolen tax data disc, originally offered to Baden-Württemberg. The disc contained the names and details of more than 20,000 Germans alleged to have evaded taxes in Switzerland. Despite its refusal to purchase the disc, Baden-Württemberg nevertheless was eager to make full use of the data.

Although the latest revelations highlight the fact that the issue of purchasing stolen tax data by German officials remains highly controversial and unresolved, it has clearly become big business for the country’s tax authorities. According to recent estimates from the German tax union DSTG, the purchase of such discs has served to generate in the region of EUR2bn in back payments for the state.

Indeed, chairman of the DSTG, Dieter Ondracek, confirmed that data records currently being examined will lead to around 3,000 investigations being launched, generating an estimated EUR500m. The existence of such files has also reportedly resulted in around 25,000 voluntary self-declarations and back payments of an additional EUR1.5bn.

Emphasizing the fact that it is the duty of the state to pursue any evidence of tax evasion, Ondracek called for a legal provision to be put in place to lawfully permit the future purchase of such data by the authorities. A clear signal must be given, Ondracek maintained, to make clear that the government is prepared to pay for such valuable information.

The DSTG claims that every year, EUR30bn in revenue is lost as a result of tax evasion.


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