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The Federal Supreme Court demands a more restrained handling of the „combined fine and imprisonment“ (BGH, judgment of 19 March 2019 – 1 StR 367/18).

Deutsche Version

The Federal Supreme Court has reversed and referred back to the appeal of the public prosecutor’s office a judgment for tax evasion amounting to millions as possibly too lenient.

To the background

Now that the Federal Court of Justice has substantiated the indefinite legal concept of „tax evasion on a large scale“ in accordance with § 370 (3) sentence 2 no. 1 of the German Tax Code (AO) and now, in application of this supreme court ruling of 2008 (BGH, judgment of 02.12.2008 – 1 StR 416/08), with a tax evasion per offence of 50,000 € or more, threatens a penalty range from 6 months to 10 years imprisonment, defenders are attempting to correct the dramatic consequences of tax evasion in such high cases in the area of sentencing penalties.

§ 41 of the Criminal Code (StGB) opens up the necessary scope for negotiation. Accordingly, under certain conditions the law provides that a further fine may be imposed in addition to a prison sentence.
For each custodial sentence to be imposed, it must be examined whether it can be suspended on probation. However, a prison sentence of more than 2 years can no longer be suspended on probation. This limit can be quickly reached with a penalty range of 6 months to 10 years with tax evasion over 50.000 € per act, why one should examine the conditions of § 41 StGB as a defender in favour of an accused one and must carry forward to the fulfilment of these conditions, if thereby the imposition of a no longer provable prison sentence for the accused can be avoided.

However, the purpose of the statutory provision is not to design a custodial sentence that would otherwise have to be imposed as a custodial sentence that can be proven only by „re-qualifying“ the sentence that goes beyond the time frame of 2 years into a fine.

To the case

So – in the opinion of the Federal Court of Justice – possibly happened in a case that was initially concluded before the Stade Regional Court with a judgment of 3 May 2018. The regional court sentenced a tax evasion of 3.87 million euros to a combined fine and imprisonment of 2 years on probation and 500 daily rates of 1,000 € each, so a total of 500,000 €.

With reference to its change of jurisdiction in 2008, the Federal Court of Justice takes the stringent line that in the case of tax evasion amounting to millions, a suspended custodial sentence should only be considered if there are particularly important mitigating grounds.
Whether the Regional Court found such mitigating grounds is not apparent from the judgment. The statements of the Regional Court on which the sentencing was based were not sufficient for the determination of a fine in addition to a custodial sentence that could be proven, so that it could not be ruled out that the Regional Court, if it had correctly weighed the aspects of the sentencing to be applied, could also have imposed a custodial sentence that would no longer have been suspended.

The proceedings were thus referred back to another economic criminal chamber of the Regional Court for a new hearing and decision, taking into account the information provided by the Federal Court of Justice.

As a result, for defense in criminal tax proceedings

For the defence in criminal tax proceedings with the accusation of a high tax reduction, this decision of the Federal Court of Justice – as a result of a large number of concrete decisions on the facts of the case and on the imposition of penalties in the case of tax evasion – must be observed at all costs in order to examine the requirements of § 41 StGB, which may in part also be based on the suspect’s behaviour at night, and to include them in the defence of his client.
I regard it as the duty of a defence lawyer to take all legally permissible defence measures in favour of his client, in particular if this avoids the imposition of a prison sentence on his client.

Rechtsanwalt in Landshut and Regensburg, Alexander Littich
Alexander Littich
Rechtsanwalt, Fachanwalt für Strafrecht und für Steuerrecht in Landshut
Steuerstrafrecht, Wirtschaftsstrafrecht
Tel.: +49 871-96 21 6-25
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