Limitation Periods for Tax Evasion With a Foreign Element: Deadlines, Suspension, Emigration

Published on 12.11.2026

Limitation of Tax Evasion Abroad

The limitation period (Verjährung) for tax evasion with a foreign element does not follow a single deadline but several clocks that start at different times and run out independently of one another. Anyone looking at an undeclared account in a third country, a holding in a foreign company or investment income from the time before an emigration usually asks only: “Surely that is time-barred by now?” The answer depends on whether the issue is criminal prosecution, assessment or payment of the tax. For cases with a foreign element in particular, the legislator has created special rules that postpone the start of the period by up to ten years, and through automatic exchange under the CRS reporting obligations for foreign accounts the tax office today learns much that used to stay hidden. This article explains the legal position as of October 2026 and puts into context what an emigration changes about limitation.

The Short Answer: 5, 10, 15 or 20 Years

Under criminal law, simple tax evasion is time-barred after five years and an especially serious case after 15 years. Under tax law, the tax office can assess evaded taxes for ten years. In certain third-country cases, however, this period starts only up to ten years after the tax arose (Section 170 (6) and (7) of the Fiscal Code (Abgabenordnung, AO)), so that the tax authorities can reach back about 20 years. The limitation period for payment follows after that.

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Criminal and Tax Limitation: Two Separate Systems

The limitation period for criminal prosecution (Strafverfolgungsverjährung) decides whether punishment is still possible; once it has expired, there is a procedural bar. The limitation period for assessment (Festsetzungsverjährung) decides whether the tax office may still assess the tax or amend a notice. In criminal law, limitation is interrupted and then starts anew; in tax law, the expiry of the period is suspended.

An offence can be time-barred under criminal law while the tax, together with interest on evaded tax of 0.5 percent per month (Sections 235, 238 (1) AO), can still be claimed. Conversely, Section 171 (7) AO prevents the assessment period from expiring before criminal prosecution is time-barred. In an especially serious case with a 15-year prosecution period, the tax office can therefore assess beyond the ten years as well.

For distinction: if intent is lacking and there is only reckless understatement of tax under Section 378 AO, it is a regulatory offence. Its prosecution is time-barred after five years (Section 384 AO), and the assessment period is likewise five years. Without culpable conduct, it remains four years. Whether there was intent must therefore be examined separately for each tax year.

Limitation of Criminal Prosecution in Detail

Five Years as the Basic Case

For simple tax evasion under Section 370 (1) AO, the general period of five years applies. Each tax year and each type of tax in principle forms a separate offence with its own running of time; the former doctrine of the “continuing act” no longer plays a role.

15 Years in Especially Serious Cases

Section 376 (1) AO extends the period to 15 years if one of the cases in Section 370 (3) sentence 2 nos. 1 to 6 AO is present. For cases with a foreign element, two groups are particularly significant:

• No. 1, understatement on a large scale: According to the case law of the Federal Court of Justice (Bundesgerichtshof), the threshold is regularly EUR 50,000 per offence. A single tax year with concealed foreign income can exceed this limit.
• No. 6, use of a third-country company: This covers anyone who uses a company with its registered office or place of management outside the EU and EFTA, over which they have controlling or determining influence alone or together with related persons, to conceal facts relevant for tax purposes and thereby continually understates tax.

Further groups concern public officials, forged documents and organised-gang evasion of VAT or excise duties. According to the prevailing view, it is sufficient for the long period that the standard example is fulfilled; whether the court assumes an especially serious case when determining the sentence is not decisive. The 15 years apply since the Annual Tax Act 2020 (Jahressteuergesetz 2020, in force since 29 December 2020); before that it was ten years. Older offences that were not yet time-barred at that point are also covered.

Start: Completion of the Offence

The period begins with completion of the offence (Section 78a StGB), not with the end of the tax year. Where an income tax return has been filed but is incorrect, the offence is as a rule completed when the notice with the tax assessed too low is announced. If no return is filed at all, case law looks to the point in time at which the assessment work for the period concerned has essentially been completed at the competent tax office. That can be two years or more after the tax year. In the case of an omitted notification for inheritance or gift tax, what matters is when the tax would have been assessed on proper notification.

Interruption and Absolute Limit

Certain investigative acts interrupt limitation, after which the period starts anew (Section 78c StGB): for example, notification of the initiation of the investigation, judicial search orders, indictment or penalty order. Under Section 376 (2) AO, notification of the initiation of regulatory offence proceedings is also sufficient. The interruption has effect only against the person to whom the act relates (Section 78c (4) StGB), and only for the offences sufficiently specifically covered by the measure.

For cases with a foreign element, Section 78c (1) StGB contains three grounds of interruption that rarely play a role in a purely domestic case:

• the arrest warrant and judicial decisions upholding it (no. 5),
• the provisional judicial discontinuance because of the absence of the accused, and orders made afterwards to establish his whereabouts or to secure evidence (no. 10),
• the judicial request to carry out an investigative act abroad (no. 12), that is, for example, a request for mutual legal assistance to another state.

Limitation cannot be postponed indefinitely. It occurs at the latest when twice the statutory period has elapsed since completion of the offence, in the basic case therefore after ten years (Section 78c (3) sentence 2 StGB). In especially serious cases, two and a half times applies under Section 376 (3) AO, that is, 37.5 years. In addition there is the suspension (Ruhen) after the main proceedings have been opened (Section 78b (4) StGB, to which Section 376 (1) AO refers). To be distinguished from this is the limitation of enforcement of final sentences under Section 79 StGB.

Limitation of Assessment: How Long the Tax Office May Claim Back

Ten Years and the Delayed Start

The assessment period begins in principle at the end of the calendar year in which the tax arose (Section 170 (1) AO). Where there is an obligation to file a return, under Section 170 (2) sentence 1 no. 1 AO it begins only at the end of the year in which the return is filed, but at the latest at the end of the third calendar year after the tax arose. Anyone who files no return for 2018 therefore triggers the start of the period at the end of 2021; in case of evasion, the period then runs until the end of 2031.

The Special Rule for Investment Income From Third Countries (Section 170 (6) AO)

For tax on investment income that comes from states outside the EU and EFTA and is not automatically reported to the German tax administration under an international agreement, the assessment period begins at the earliest at the end of the calendar year in which this income became known to the tax office, but at the latest ten years after the end of the year in which the tax arose. The rule applies to assessment periods that begin after 31 December 2014 (Article 97 Section 10 (13) of the Introductory Act to the Fiscal Code (EGAO)).

A third-country link and the absence of automatic reporting must coincide. Accounts in Switzerland or Liechtenstein, as EFTA states, do not fall under paragraph 6, and neither does income from states that report under the Common Reporting Standard, to the extent it is covered by the reporting. Whether this applied to a given country, type of income and year must be clarified separately in each case.

Relationships With Third-Country Companies (Section 170 (7) AO)

A corresponding delayed start applies to tax on income or earnings connected with relationships to a third-country company within the meaning of Section 138 (3) AO over which the taxpayer, alone or together with related persons, can exercise controlling or determining influence. Third-country companies are corporations, associations of persons or pools of assets with their registered office or place of management outside the EU and EFTA; foreign foundations can also fall under this. The period begins at the earliest at the end of the year in which the relationships became known through notification by the taxpayer or in another way, at the latest ten years after the tax arose. The rule applies to assessment periods that begin after 31 December 2017 (Article 97 Section 10 (15) EGAO). Closely linked to this is the notification obligation under Section 138 (2) sentence 1 no. 4 AO when such influence is first obtained. On lawful foreign structures on emigration, see the article on the family foundation for emigrants.

Suspension of Expiry Under Section 171 AO

Once the period has started, its end can be postponed by suspensions of expiry (Ablaufhemmungen). For evasion cases, the following provisions are particularly significant:

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Further cases are, for example, obvious errors (Section 171 (2) AO) and basic notices (Section 171 (10) AO).

Worked Examples

Example 1, account in a third country without automatic exchange: In 2016, Konrad earns interest of EUR 8,000 on an account in a state outside the EU and EFTA that does not report account data to Germany. This income is missing from his return filed in 2017; the notice is announced in June 2017. The offence is thereby completed, and the five-year prosecution limitation ran out without interruption in June 2022. For tax purposes, the ten-year assessment period under Section 170 (2) AO would start at the end of 2017. Because of Section 170 (6) AO, however, it starts only at the end of the year in which the tax office learns of the income, at the latest at the end of 2026. If it learns nothing until then, the assessment period runs until the end of 2036, that is, twenty years after the tax year.

Example 2, especially serious case: In 2019, Bettina conceals income from a controlled company in a third country, resulting in an understatement of EUR 60,000. The standard example of large scale is thus likely fulfilled. The prosecution limitation period is 15 years from announcement of the incorrect notice; via Section 171 (7) AO, the tax also remains assessable for that long. If investigations are initiated, the period starts anew, at most up to the limit of 37.5 years.

What an Emigration Changes About Limitation and What It Does Not

The Periods Keep Running

A move abroad stops neither the limitation of criminal prosecution nor the limitation of assessment; German criminal law does not know a general suspension because of a stay abroad. The authorities do, however, have the grounds of interruption mentioned: arrest warrant, proceedings in absentia and requests for mutual legal assistance. Whether the state of residence grants legal assistance or extradites depends on its law and on the treaties; an adviser on the ground there should be consulted on this.

The tax office can also announce notices abroad; to preserve the period, it is sufficient that the notice has left the tax authority’s sphere before the period expires (Section 169 (1) sentence 3 no. 1 AO). It can also require the appointment of a domestic authorised recipient (Section 123 AO), see tax representation after emigration.

Offences Committed Abroad Are Covered Too

Under Section 370 (7) AO, the offence applies irrespective of the law of the place of the act, including to acts committed abroad. Anyone who remains tax-liable in Germany after emigrating, for example with German rental income or because the German residence was not given up, can also commit evasion from abroad. Whether unlimited tax liability has actually ended depends on residence and habitual abode; on this see the article on habitual abode in tax law.

Foreign Assets After Emigration

Once unlimited tax liability ends, foreign investment income for the period afterwards generally no longer has to be declared in Germany. For the years before the emigration, however, the periods described continue to run unchanged, including the delayed start under Section 170 (6) and (7) AO. After emigration, German-source income can also be captured through extended limited tax liability (erweiterte beschränkte Steuerpflicht) under Section 2 of the Foreign Tax Act (Außensteuergesetz, AStG); it requires, among other things, at least five years of unlimited tax liability as a German national in the last ten years, low taxation in the new state of residence and substantial economic interests in Germany. Anyone who leaves with substantial shareholdings in corporations must also declare the exit gain under Section 6 AStG, see exit tax on GmbH shareholdings. If this is omitted, a new offence with its own running of time arises. For inheritance tax purposes, Germans remain subject to unlimited tax liability for five more years after emigration under Section 2 (1) no. 1 letter b of the Inheritance and Gift Tax Act (ErbStG).

How the Tax Administration Learns of Foreign Matters

Since the first automatic exchange under the Common Reporting Standard in 2017, the Federal Central Tax Office (Bundeszentralamt für Steuern) has received account data every year from numerous states. In addition there are the exchange with the USA under the FATCA agreement, requests for information under double taxation treaties, group requests, purchased data carriers and notifications under Section 138 AO. Within the scope of Section 170 (6) and (7) AO, each such indication at the same time sets the start of the assessment period in motion.

Limitation in Inheritance Cases

With death, criminal prosecution against the taxpayer ends. The tax debt, however, passes to the heirs (Section 45 AO), and the ten-year assessment period continues to apply against them. If heirs recognise that the deceased’s declarations were incorrect, they are obliged under Section 153 (1) sentence 2 AO to correct them without undue delay. If they fail to do so, their own tax evasion with a new period can arise, which happens frequently with inherited foreign accounts. On foreign inheritance tax, see the article on inheritance tax and double taxation treaties.

Limitation and Voluntary Disclosure

The voluntary disclosure that exempts from punishment under Section 371 AO must cover all tax offences of one type of tax that are not time-barred, but at least all offences of that type of tax from the last ten calendar years (Section 371 (1) sentence 2 AO). Years that are already time-barred under criminal law may therefore still have to be disclosed. If the understatement exceeds EUR 25,000 per offence or a case under Section 370 (3) sentence 2 nos. 2 to 6 AO is present, for example the use of a controlled third-country company, impunity does not occur; only a refraining from prosecution against payment under Section 398a AO then comes into consideration. Typical pitfalls of a voluntary disclosure are described in the article Chaosfalle Selbstanzeige; the basis in every case is a limitation calculation for each individual year.

Common Errors in Calculating Deadlines

1. Five years counted from the tax year: Criminal limitation begins only with completion of the offence, in case of non-filing often years later.
2. Overlooking Section 170 (6) and (7) AO: In third-country cases, the assessment period can start only ten years after the tax arose.
3. Threshold of EUR 50,000 not checked per year: A single high-income year can extend the period to 15 years.
4. Overlooking heirs’ duties: The duty to correct under Section 153 AO can establish a new offence with a new period.

Binding Ruling in Case of Open Legal Questions

The binding ruling (verbindliche Auskunft) under Section 89 (2) AO concerns facts not yet realised, not the clearing up of the past. For planned steps around an emigration, for example a future foreign holding with notification obligations under Section 138 AO, it can provide clarity before implementation where the legal position is unclear. The ruling is subject to a fee (Section 89 (3) to (5) AO). Where there is a foreign element, a ruling from the tax authority in the other state may also make sense; an adviser on the ground there should be involved.

Conclusion

Limitation of tax evasion with a foreign element can be determined only year by year and separately for criminal and tax law. Under criminal law, five or 15 years from completion of the offence apply, with absolute limits of ten or 37.5 years. Under tax law, an assessment period of ten years applies, whose start can be deferred by up to ten years in third-country cases. An emigration ends none of these periods. The starting point of any clarification is therefore an overview of deadlines for every year and every type of tax.

Frequently Asked Questions

When is tax evasion involving a foreign account time-barred under criminal law?

As a rule five years after completion of the offence, usually from the announcement of the incorrect notice. In especially serious cases, for example from EUR 50,000 understatement per offence, it is 15 years.

Can the tax office claim back tax even though the offence is time-barred under criminal law?

Yes. The assessment period in case of evasion is ten years and often starts later than the criminal prosecution period. In addition there is interest on evaded tax of 0.5 percent per month.

What does the delayed start under Section 170 (6) AO mean?

For investment income not automatically reported from states outside the EU and EFTA, the assessment period begins only when the tax office learns of it, at the latest ten years after the tax arose.

Does an emigration stop limitation?

No. An arrest warrant, proceedings in absentia or a request for mutual legal assistance can, however, interrupt limitation under criminal law.

Must heirs correct the deceased’s tax evasion?

Yes, as soon as they recognise the inaccuracy, without undue delay under Section 153 AO. The tax can be assessed against them within the ten-year period.

Attorney Dr. Johannes Fiala and the law firm, with a focus on international inheritance law, tax law and asset protection in Munich, advise taxpayers with foreign assets and emigrants on limitation of tax cases with a foreign element, from calculating the deadline for each individual tax year and reviewing a correction or voluntary disclosure to the tax consequences of an emigration. Dr. Fiala has published extensively on emigration and asset protection. Get in touch with the firm without obligation to discuss your individual situation in an initial consultation.