Field help: (2018) Do you maintain ongoing business relations with financial institutions in another country?

In the case of business relations abroad, taxpayers are required to cooperate to a greater extent. In general, a business relationship is considered to be long-lasting if it is established on a permanent basis. This can therefore also be the case if you have accounts at financial institutions abroad, even if they are managed by a trustee.

In this case, the tax office can also ask you to confirm the accuracy of your information under oath. Caution: In case of a false sworn statement, you are liable to prosecution. A false statement can be punished with imprisonment for up to three years or with a fine (section 156 of the Criminal Code (StGB)). If you refuse to submit a sworn statement as required by the tax office, you will have to expect an assessment and, as a result, higher taxation.

The tax office will simply assume that you have income in the non-cooperating state and will estimate this to your disadvantage (sect. 162 para. 2 sentence 3 of the Fiscal Code (AO)). In addition, the tax office can oblige you to keep records and documents for 6 years (sect. 147a sentence 6 of the Fiscal Code (AO)). Furthermore, it can order an external audit at any time (sect. 193 para. 2 no. 3 of the Fiscal Code (AO)).