In a most recent judgment, the Supreme Tax Court held that bribes confiscated under criminal law reduce the VAT basis of the respective turnover affected under criminal law. A tax that has already been assessed must be corrected at the time of collection in accordance with Section 17 (1) sentence 1 VAT Act.
The Supreme tax court has held that bribes received are taxable as other income with the consequence that any damages payable later cannot be offset against income from other sources.
The Supreme Tax Court has held that the prohibition on claiming a deduction for bribes also includes the legal costs of an unsuccessful defence as well as the court-ordered confiscation of the profits from the corrupt trading. A deduction for the confiscation would only be possible if the amount had not been calculated net of tax.
