Germany cracks down on money laundering, tax fraud
Germany is preparing a major crackdown on money laundering and tax fraud, introducing tougher laws, stronger enforcement, and advanced technology to recover billions of euros lost through financial crime.
The German government has approved a 26-point action plan designed to combat tax evasion, organized financial crime, and money laundering. Finance Minister Lars Klingbeil said honest taxpayers should not be disadvantaged while criminals hide wealth or avoid paying taxes. The reforms are expected to strengthen confidence in the country's tax system and significantly increase government revenue.
One of the biggest changes is a sharp increase in penalties for serious tax crimes. Organized tax fraud could carry prison sentences of up to 15 years instead of the current 10. Tax evasion would also be treated as a felony rather than a lesser offense, making it easier for authorities to pursue tougher legal action against offenders.
The government also plans to modernize investigations by using artificial intelligence to detect suspicious financial activity. Around 1,500 additional customs officers will be recruited, while a new national data analysis center will improve cooperation between federal and state authorities. Businesses that handle large amounts of cash will be required to use electronic cash registers, and accounting records must be kept for 15 years instead of 10.
Several loopholes that previously allowed tax offenders to avoid prosecution will be removed. Companies involved in tax evasion could face higher fines, authorities will receive stronger powers to seize suspicious assets, and protections for whistleblowers reporting financial crimes will be expanded. The government expects the measures to generate at least €1 billion in additional tax revenue in 2027, with officials believing the long-term financial benefits could be much higher.