Given the increasing number of tax audits currently taking place, those offering holiday accommodation in Germany should be well advised to check their information on income and value-added tax as well as on the cultural and tourism tax due in some areas.
Only recently, the Hamburg tax authorities issued a clear warning to landlords after requesting booking data from around 56,000 providers from all over Germany from an international agency portal for private holiday accommodation. In particular, the US company Airbnb, said to generate an annual turnover of more than one billion euros, has come into the sights of the tax investigation. The review is now to be continued systematically in all federal states: Corresponding data would be passed on to the responsible tax administrations of the individual federal states.
The evaluation of the turnover of 8,000 German providers carried out for 2021 and 2022 showed that the state regularly loses considerable tax revenue in the hospitality industry. This resulted in additional tax revenue for the federal government, totalling four million euros. The example of the city of Hamburg clarifies what tax losses can be expected at the municipal level if this gap is not closed. For the Hanseatic City alone, the additional income and turnover tax demands amounted to 706,000 euros. Another 195,000 euros had to be paid in arrears for the culture and tourism tax.
Given the declining tax revenues, the persistence of the tax investigation seems entirely justified. "By requesting data again, the detection of untaxed rental income is consistently continued," said Hamburg's Finance Senator Andreas Dressel (SPD). For tax-dishonest landlords, this increases the risk of being discovered.
Possible Consequences of Tax Evasion
Landlords of holiday homes who have failed to provide complete information on income and turnover tax or to pay the culture or tourism tax properly face considerable consequences. The range of penalties for tax evasion includes imprisonment for up to five years or a fine (Section 370 (1) sentence 1 of the German Fiscal Code, AO). The decisive factor in determining the penalty is the amount of tax evaded.
The Federal Supreme Court in Germany has drawn up corresponding guidelines for this and has continuously developed them further.
Voluntary Self-disclosure as a Way Out
Those who have not correctly declared their income and have thus committed tax evasion have the option under Section 371 AO to exonerate themselves by filing a voluntary self-disclosure. As is well known, the efficiency of such a procedure depends on the time of filing: If the authorities have already announced an investigation or even started office or house searches, it is usually too late to file the voluntary self-disclosure.
When filing voluntary criminal charges, formal aspects must also be considered to avoid incriminating oneself unnecessarily by providing imprecise information and not jeopardising impunity. Because of the risks lurking here, it seems highly advisable to consult an experienced tax lawyer in such a situation.
Schlun & Elseven: Legal Assistance in German Tax Law
To provide our clients with the support they need in such a situation, the German law firm Schlun & Elseven Rechtsanwälte offers comprehensive and committed legal assistance. Our lawyers for German tax law will be happy to provide an overview of the current legal situation in matters of voluntary self-disclosure. In doing so, we will inform you about the requirements that must be fulfilled to make a voluntary declaration that exempts you from prosecution.
In cooperation with you, our lawyers will calculate the back taxes to be paid to subsequently prepare your voluntary disclosure and submit it to the competent tax office. We will handle the subsequent correspondence with the tax office on your behalf and are committed to ensuring that your rights and interests are always protected.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
