Berlin drafts law aimed at shell company tax cheats

Germany is looking to intensify its crackdown on tax evaders who are stashing their assets in offshore companies, according to a draft law seen by AFP on Thursday.

"The main purpose of this draft law is to make it more difficult for domestic taxpayers to evade taxes through companies domiciled offshore, and to use the heightened risk of being discovered as a deterrent," according to the draft by the finance ministry.

Documents leaked in April from Mossack Fonseca, the Panama City law firm which specialised in the creation of so-called letterbox companies, highlighted the extent of tax evasion by the world's wealthiest individuals and companies through such offshore fronts.

According to the draft law, Berlin will require taxpayers and banks to provide more transparency on their links with such shell companies domiciled outside the European Union.

The requirement to declare assets would be reinforced, and failure to comply could lead to fines of up to €25,000 for individuals.

The ministry also plans to extend the statute of limitations time-frame during which tax evasion cases can be pursued.