1. What does criminal statute of limitations mean?

The statute of limitations in criminal law regulates how long a criminal offence can be prosecuted. Once the respective limitation period has expired, the state’s right to prosecute is extinguished. Regarding the relevant limitation periods, a distinction must first be made between simple and absolute limitation.

2. What is the difference between simple and absolute limitation?

The difference between the two forms of statute of limitations lies in the possibility of interruption and the final expiry of the right to impose punishment.

2.1 Simple statute of limitations

A simple statute of limitations refers to the regular limitation period within which a criminal offence can be prosecuted. However, this period can be interrupted by certain actions, such as the filing of a public indictment or judicial questioning of the accused. After each interruption, the statute of limitations begins to run again (sec. 78c of the German Criminal Code (StGB)). In addition, the statute of limitations can be suspended (sec. 78b StGB), in which case, it does not (continue to) run.

2.2 Absolute statute of limitations

An absolute statute of limitations applies when a certain maximum period has been reached, after which a criminal offence can no longer be prosecuted, regardless of any interruptions. This maximum period is twice the length of the regular statute of limitations (sec. 78c para. 3 StGB). After this period has expired, the right to prosecute expires for good and the offence can no longer be prosecuted. However, if the statute of limitations is suspended, an absolute statute of limitations cannot occur (sec. 78c para. 3 sentence 4 StGB)

3. Statute of limitations regarding tax evasion

3.1 When does the limitation period begin?

The limitation period begins to run when the offence is completed (sec. 78a StGB). In the case of tax evasion, when the offence is completed depends on whether it was committed by active action (sec. 370 para. 1 no. 1 German Fiscal Code) or by omission (sec. 370 para. 1 no. 2 German Fiscal Code).

In the case of tax evasion, a distinction must then be made between assessment taxes (e.g. income tax, corporation tax, trade tax) and taxes due (e.g. wage tax, VAT, most excise duties).

3.2 Tax evasion through active action

In the case of evasion of assessed tax through active conduct, the offence is completed upon notification of the incorrect tax assessment.
In the case of evasion of VAT due through active conduct, the offence is completed when the VAT is declared too low on the statutory due date for registration has expired (e.g. the 10th of the following month for advance VAT returns). If the declaration results in a refund, the offence is only completed once the tax office has approved the refund (sec. 168 para. 2 German Fiscal Code).

3.3 Tax evasion by omission

In the case of evasion of assessment taxes by omission, it must be determined when the assessment would have been made, at the earliest, if the tax return had been submitted on time. According to the jurisprudence of the Federal Court of Justice, this is the case if the assessment work for the relevant period has been mostly completed – approximately 95%.

In the case of evasion of taxes due through omission, the offence is deemed to have been committed if no return is filed by the statutory due date and no extension has been granted.

The criminal statute of limitations for tax evasion is governed by sec. 78 para. 3 no. 4 of the German Criminal Code (StGB) and is generally five years. In particularly serious cases, which are listed in sec. 370 para. 3 sentence 2 nos. 1-6 of the German Fiscal Code (AO), the statute of limitations is fifteen years (in old cases that were not yet time-barred on 28 December 2020, possibly still ten years pursuant to sec. 376 (1) AO, old version).