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A tax advisor’s duty of confidentiality arises, under professional law, from Section 57 (1) of the Tax Advisory Act (StBerG) and, under criminal law, from Section 203 (1) No. 3 of the Criminal Code (StGB).

If criminal tax proceedings are initiated against the tax advisor’s client, the question of whether a release from confidentiality is required may arise in various scenarios:

1. Tax advisor discovers client’s tax evasion (without self-disclosure)

According to Federal Court of Justice (BGH) case law, if tax evasion is discovered subsequently, the advisor is under no independent obligation to make a correction pursuant to Section 153 of the Fiscal Code (AO). Making an independent report to the tax authorities would constitute a breach of the duty of confidentiality.

2. Initiation of criminal tax proceedings against the client

If criminal tax proceedings are initiated against the client, the tax advisor may often be considered as a witness. In this context, the advisor has a comprehensive right to refuse to testify pursuant to Section 53 (1) No. 3 of the Code of Criminal Procedure (StPO). Testifying without a prior release from confidentiality by the client entails the risk of criminal liability under Section 203 StGB and a breach of professional duties.

3. Search and seizure of the tax advisor’s working files

The tax advisor’s working files (confidential documents, correspondence, meeting notes) generally fall within the scope of protection afforded to the confidential relationship. Immunity from seizure under Section 97 StPO is linked to the right to refuse to testify and the duty of confidentiality. If the client grants a release from confidentiality, this immunity from seizure no longer applies, and the working files may be seized.

4. Tax Advisors as (Co-)Perpetrators or Accomplices in Tax Evasion

In cases where a tax advisor actively participates in a client's tax evasion, the advisor faces potential liability not only for the breach of private secrets (Section 203 of the German Criminal Code/StGB) but also for aiding and abetting tax evasion.

5. Recommended Course of Action

Absent an express or implied waiver by the client, advisors are generally prohibited from disclosing secrets related to the mandate; this applies particularly in the context of criminal tax proceedings.

Thorough documentation (date, scope, and purpose of the waiver) is essential in the event of a review under professional regulations or criminal law, in order to demonstrate that any disclosure was not "unauthorized."

If you have questions, please contact us at: kanzlei@wild.legal