Criminal Law Right to Silence vs. Tax Law Duty to Communicate

In many cases, taxation and criminal proceedings are closely intertwined. Tax and criminal tax investigations can often hardly be separated from each other.

The resulting problems raise the question of which provisions should take precedence in the event of a conflict – the provisions of the Tax Code (taxation proceedings) or those of the Code of Criminal Procedure (criminal proceedings)?

§ Section 393 AO regulates the relationship between criminal proceedings and taxation proceedings. According to the provision of Section 393 (1) sentence 1 AO, the rights and obligations of the taxpayer and the tax authority in the taxation proceedings and in the criminal proceedings are governed by the provisions applicable to the respective proceedings.

In principle, the Tax Code assumes the independence and equal status of the proceedings, so that the taxpayer remains obliged to provide information and cooperate in the taxation proceedings even in the event of parallel criminal tax proceedings.

Section 393 (1) sentence 2 of the German Fiscal Code (AO) imposes a restriction on this assumption in the form of the statutory provision that coercive tax measures are inadmissible in the event of a risk of self-incrimination for a tax offense or misdemeanor.

The cooperation of the taxpayer in the tax investigation procedure is thus no longer enforceable after the initiation of criminal tax proceedings – because: no one has to incriminate himself (nemo tenetur se ipsum accusare).

This means that the accused does not have to cooperate in the criminal proceedings and can refuse to make any statement on the matter. The right of the accused to remain silent on the accusation of the crime is one of the fundamental principles of the rule of law in criminal and fine proceedings. No one is obliged to cooperate in his own conviction.

Beyond the right to remain silent, the accused is entitled to refuse any active cooperation in his conviction. He is therefore also not required to hand over evidence, because in this respect it can make no difference whether his conviction is made possible on the basis of compelled statements or by compelled production of documents. The accused has a right to passivity, he is only obliged to tolerate criminal procedural measures.

The right to silence and the freedom to cooperate are individual manifestations of the general and comprehensive right not to incriminate oneself. This right has constitutional status, since it is derived from the principle of the rule of law (Article 20 III GG) and the right to respect for human dignity (Article 1 I, Article 2 I GG). It follows from Article 2 I of the Basic Law in conjunction with Article 1 of the Basic Law that it would be unreasonable and incompatible with human dignity if coercion were exercised to the effect that the prerequisite for a criminal conviction had to be met by making one’s own statements.

However, since the tax obligations to cooperate continue to apply, a conflict may arise with the defendant’s right to remain silent if the facts to be assessed are of significance under both tax law and criminal law.

The freedom from incrimination under criminal law and the duty to provide information and cooperate under tax law come into conflict where the taxpayer, in properly fulfilling his tax obligations, must disclose information that provides clues to criminal acts committed by him. A predicament arises, since the taxpayer cannot make use of his freedom of self-incrimination without violating his obligations arising from the taxation procedure.

Since the taxpayer, while respecting his constitutionally protected right not to have to cooperate in his own transfer, cannot at the same time be obliged to comply with his tax information and cooperation obligations, a clear tension arises. This tension, which must be resolved, raises the question of which procedural principle must be given priority in cases of conflict.

§ Section 393 of the German Fiscal Code (AO) is aimed at resolving precisely this conflict between the freedom to incriminate oneself in criminal law and the statutory duties to provide information and to cooperate in tax law.

In this respect, the taxpayer is granted a selective right to silence, i.e. his tax cooperation obligations remain in place even in the event of a risk of self-incrimination, but they can no longer be enforced with coercive tax means.