German tax evasion and asset seizure legislative measures

The German government has introduced a comprehensive plan to combat tax evasion and money laundering as part of its 2027 budget. The initial proposal includes a 26-point action plan featuring the creation of a “Tax and Financial Crime Joint Center” within the customs authority, which would be supported by 1,500 new employees and an AI-driven data-analysis unit.

Key measures include ending “self-reporting” immunity for tax offenses, increasing maximum prison terms for serious tax crimes to fifteen years, and establishing a minimum one-year sentence for organized crime. The plan also targets cryptocurrency holdings and introduces new cash-register obligations for high-turnover merchants.

Legislative efforts have progressed toward a draft law that introduces a reversal of the burden of proof. Under this proposal, if a significant discrepancy exists between an individual’s declared income and their assets—such as real estate, luxury vehicles, or watches—the assets are legally presumed to have been acquired illegally. In such cases, the individual must prove the legitimate source of the wealth. Furthermore, customs authorities would gain the power to temporarily seize assets valued at approximately 100,000 euros if the origin of the funds cannot be plausibly explained.

Authorities are now intensifying efforts specifically targeting the cryptocurrency market. Under new customs legislation, the German Customs service is receiving expanded powers and additional personnel to facilitate the seizure of assets, including Bitcoin, real estate, and vehicles.

In North Rhine-Westphalia, the State Office for Combating Financial Crime (LBF NRW) has conducted a massive data acquisition from the trading platform Bitcoin.de. This data, covering transactions from 2018 to 2023, has led to the identification of thousands of tax cases. Consequently, investors active on the platform during this period are receiving official requests from tax authorities across various federal states demanding detailed transaction records.