a. Tax avoidance in Germany (Siddhart Medhi)
A number of schemes exist in the tax system, which enables corporations to avoid taxes and some of these loopholes are perfectly legal. In 2009 the German newspaper, Der Spiegel, reported a scheme referred to as the Malta Loophole. It is quite simple and has been used by multinational corporations such as Lufthansa and Puma. It works by setting up a subsidiary in Malta and thus paying taxes to the Maltese state. The tax rate in Malta is 35% and is thus higher than in Germany, however, the shareholders can apply for a refund for most of the amount. The reason for this is that if profits are being distributed as dividends then the tax rate is only 5%. The scheme works in the following way: if the profit of the subsidiary is 100 million then 35 million is paid to the Maltese state where after the shareholders can get a refund of 30 million and return it to the German parent company. Returning the money from the shareholders is due to the German tax system 95% tax exempt. The effective tax rate is thus cut to merely 6.42%
Another example of tax avoidance is when Volkswagen took full control of Porsche in 2012. Volkswagen at the time already owned 49,9% of the shares in Porsche and was interested in buying the remaining 51.1% in order to have full control and gain synergy effects worth €700 million a year (Bryant, 2012). The price of this was €4,5 billion, which would have to be taxed by €1,5 billion. However, they found a way around this where Volkswagen paid Porsche the €4,5 billion plus one single voting share in Volkswagen. Because of this single voting share the takeover was now considered a restructuring and thus not liable to taxes, saving Porsche €1,5 billion in tax bills.

b. Tax evasion in Germany (Avdoot)
Case: Carbon permit fraud (Julia)
In 2011 six businessmen were jailed for tax evasion . In just 8 months the 6 swindlers had evaded tax of approx. €300 million on carbon permits which were bought abroad. When buying permits abroad companies need not pay taxes. Thus the frauders resold the permits in Germany before selling them on again abroad.
Deutsche bank carried out the activities and 7 staff members of the bank were also being investigated for taking part in the tax evasion scheme.
From this exemplification we can determine that the tax avoidance system is often being violated to save large amounts of money on taxes.
According to Bloomberg.com, tax evasion will cost Germany €65 Billion in 201 . Thus the German government has taken steps to combat the increasing trend for violating the tax-system.

Measurements imposed by German government: (Julia)
The German finance minister has spent the summer of 2012 buying CDs of stolen Swiss bank data (both original and illegal copied CDs), which reveals names of German tax evaders from 2006. . This has led to may Germans declaring their tax evasions themselves to prevent being penalized, as they do not know what will happen if their names are on the CDs. By actively declaring income voluntarily dodgers can avoid prosecution if the government has not already opened an investigation on their specific cases.
The measures have led to a double in the number of voluntary tax-declarations alone in 2010 .
The German government, for instance, received a letter containing €2,000 from an anonymous person claiming to have an outstanding amount of taxes to pay due to having unjustifiably declared some advertisement costs and interest on these, which the person was not entitled to. So to clear the dodger’s conscience, or in the hope of not being penalized her/his outstanding amount of tax was paid. However, since the letter was anonymous, the person will be forced to pay the amount again if caught in the future