The audit firm’s branch in the capital was also searched.
(Photo: Reuters)
Dusseldorf It was an extraordinary move: more than 250 investigators went out on Tuesday to search several PwC offices. The suspicion against the auditing and consulting company weighs heavily. Several leading employees are said to have implemented a tax evasion model in their own company between 2012 and 2017.
According to the investigating General Public Prosecutor’s Office in Frankfurt, sales generated by PwC in Germany have been relocated to Switzerland. As a result, sales taxes in the double-digit millions were evaded.
Public prosecutors and officials searched PwC’s offices in Frankfurt, Berlin, Düsseldorf, Hanover and Stuttgart. Investigators also searched the suspects’ homes and homes. There are a total of eight current and former company executives.
Four of the accused are still employed by the company. The public prosecutor’s office was supported in the raid by the Hessian tax investigators and the Federal Criminal Police Office.
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Specifically, PwC is said to have used its international network in the alleged tax evasion model to avoid sales tax on consulting services provided in Germany. PwC used its Swiss offices from the joint international network for this purpose.
Concealment of the consulting services
“The inclusion of the Swiss company is said to have served exclusively to conceal the advisory services in Switzerland and thus to evade sales tax,” said the Public Prosecutor’s Office.
PwC only confirmed the searches indirectly on Tuesday and did not want to comment on the facts. “Public prosecutor’s investigations keep coming up. We have precise processes and clear procedures that our employees are familiar with, “said the company, adding:” We cooperate fully with the authorities. “
PwC has one of the largest tax advisory departments in Germany. The Tax & Legal division achieved sales of 574 million euros in the past 2020/21 financial year. Among other things, it is in the focus of the investigators.
Because the consulting services provided by PwC were all about the subsequent declaration of capital income from investments in Switzerland and the subsequent payment of evaded taxes by clients. The tax experts advised their clientele on possible voluntary disclosures.
The clients themselves had withheld income from the tax authorities and can obtain impunity by voluntarily reporting if they act skilfully. They are supported in this by the large tax consultancy firms with international networks.
Possible tax evasion
This service itself is not reprehensible. However, it is a possible tax evasion if advice does not pay tax on the turnover achieved in the place where it was generated. The client’s desire for discretion may also play a role in PwC’s decision not to locate the advisory services in Germany.
According to the public prosecutor’s office, the damage amounts to a total of eleven million euros. This is potentially serious tax evasion. According to the basic stipulations of the Federal Court of Justice, custodial sentences from an evasion amount of one million euros can no longer be suspended.
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