Staying calm and relaxed is the most important action you can take. Even when the tax investigation takes you by surprise, treat the investigators respectfully and remain calm. Mistakes can be easily made with an aggressive response. Resistance is not advisable as it will not achieve anything if the investigators have a search warrant.
However, it is advisable to see the search warrant in question and get a copy. The search warrant outlines the exact parameters of the investigation. There is no “blank check” in such investigations; they must fulfil their set requirements; therefore, having a copy of the search warrant will allow you to see precisely what they are looking for.
When the tax investigator arrives, moving them into an office or another location away from the company’s primary business is best. From here, you can get in contact with our tax lawyers. It is not forbidden or against the law to receive outside counsel.
Please do not provide any additional information until our tax lawyers have consulted with you. Once the tax investigator is aware that your tax lawyers are informed of the matter, they will know to act with care. Professionals will scrutinise their actions.
If you are in the midst of a tax investigation, it is too late to file a voluntary self-disclosure. Ensure that your employees are instructed to keep their silence and inform them that the matter will be resolved by company management.
The tax investigators should also not be left alone within your premises during the investigation. They should, of course, not be prevented from doing their work, but having people stay with them throughout the investigation ensures that you know exactly what they have and have not seen.
Should they request documents or other evidence, ensure they are “seized”. Do not simply volunteer documents.
During the investigation, keeping records of the visit is strongly advised. When they visited, how they acted, what they seized and with as much detail as possible. Keep such documentation safe for our tax lawyers to look over and thus ensure that they have acted within their remit.
In summary, a tax investigation in Germany can be a complex and daunting process. However, by hiring a tax lawyer, reviewing your tax records, cooperating with the authorities, responding to all correspondence, keeping your cool, and following your lawyer’s advice, you can ensure that the investigation proceeds smoothly and in your favour.