Receiving a letter from the German Familienkasse demanding the repayment of Kindergeld can be a cause for concern. This is particularly true if the authority points out irregularities in the application or mentions the possibility of criminal tax proceedings being brought. In such a situation, the question arises: Does the need to repay Kindergeld automatically mean that tax fraud has taken place?
No. The obligation to repay an unduly paid benefit and criminal fiscal liability are two separate matters. The mere fact that a decision has been issued revoking Kindergeld and demanding repayment does not in itself constitute a criminal offence.
This does not, however, mean that providing false or incomplete information in an application for German family benefits has no consequences. According to figures cited by the Bund der Steuerzahler Deutschland e.V., there were approximately 140,000 suspected cases of Kindergeld fraud in 2024–2025. In 2024 alone, the Familienkasse determined claims for the recovery of this benefit totalling over 321 million euros (source: Bund der Steuerzahler Deutschland e.V. – statement of 18 June 2026.).
These figures illustrate the scale of the checks and investigations carried out in Germany. It should be borne in mind, however, that a suspicion of fraud or a finding that benefits must be repaid does not amount to a finding of a criminal offence.
When might irregularities in a Kindergeld application lead to criminal tax proceedings? What role does the Familienkasse play, and on what grounds might a defence against the charges be based?
We explain the key issues arising from German legislation.
If you’d like to find out about the basic rules governing the payment of German family benefits first, please also read our article: Who is entitled to the German family benefit Kindergeld?.
1. Child benefit and tax fraud – when can criminal tax proceedings be brought?
The provision forming the basis for criminal tax liability in the event of providing false or incomplete information in a Kindergeld application may be Section 370(1)(1) of the German Tax Code – Abgabenordnung (AO). This provision relates to tax evasion (Steuerhinterziehung). However, not every inaccuracy in an application automatically means that a criminal offence has been committed.
What circumstances are relevant to criminal liability?
Where § 370(1)(1) of the Tax Ordinance applies, it is necessary to establish the following circumstances:
- The information provided related to facts relevant to entitlement to Kindergeld.
- The information provided was incorrect or incomplete.
- As a result of their transfer, the perpetrator obtained an unjustified tax advantage for themselves or another person.
- There was a causal link between the provision of the data and the benefits received.
- The perpetrator acted intentionally.
- The information has been forwarded to the Familienkasse or another competent authority.
In accordance with Section 370(4), second sentence, of the German Fiscal Code (AO), tax benefits also include tax refunds (Steuervergütungen). In turn, Section 31, third sentence, of the German Income Tax Act (Einkommensteuergesetz – EStG) states that Kindergeld is paid out during the year as a benefit in the nature of a tax refund. This means that the undue granting or payment of Kindergeld may also be relevant under the provisions of criminal tax law.
Does the initiation of proceedings mean that the authorities have already found the person in question guilty?
No. Pursuant to Section 397 of the Tax Code (AO), criminal tax proceedings are deemed to have been initiated when the competent authority takes action explicitly aimed at investigating a specific suspicion that an offence has been committed. Such actions must be based on specific circumstances indicating the possibility that a prohibited act has been committed, and not merely on conjecture.
The authority is obliged to take into account both the evidence against the suspect and any circumstances that may speak in their favour.
The mere initiation of proceedings does not, therefore, imply guilt. It means that it is necessary to establish whether a breach of the provisions of the Criminal Tax Law has in fact taken place.
2. Kindergeld refunds versus criminal tax proceedings – how do they differ?
This distinction is particularly important for people who have received a decision from the Familienkasse revoking the benefit granted and requiring them to repay the money already paid out.
In practice, there may in fact be two separate sets of proceedings:
- administrative proceedings concerning the amendment or revocation of a decision granting Kindergeld and the recovery of benefits paid in error;
- criminal tax proceedings concerning potential liability for providing false or incomplete information.
Although both proceedings may be based on the same facts, their objectives and grounds are different.
Can the Familienkasse demand repayment of Kindergeld, even if the recipient did not act intentionally?
Yes. The obligation under public law to repay a benefit paid without a legal basis may arise regardless of whether the beneficiary acted intentionally, was negligent, or is not at fault. It is not necessary to prove fault, intent or negligence on the part of the recipient for the obligation to repay to arise. The situation is different when it comes to criminal fiscal liability, where the conditions set out in criminal law are relevant.
Therefore, a decision to reclaim Kindergeld does not automatically imply that tax fraud has been committed.
These are two separate issues which should not be conflated. It is also worth bearing in mind that matters relating to the repayment of family benefits may involve issues concerning the coordination of social security systems within the European Union.
We discuss this topic in more detail in the article: CJEU Judgment C-36/23 – reimbursement of family benefits and Kindergeld.
3. What role does the Familienkasse play in criminal tax proceedings?
The Familienkasse is primarily associated with the institution responsible for awarding and paying Kindergeld. However, its role is not limited solely to processing applications and issuing decisions regarding the benefit. Depending on the nature of the case, the Familienkasse may conduct both administrative proceedings and criminal tax proceedings.
As part of the investigative measures undertaken in criminal tax proceedings, it is authorised, amongst other things, to:
- the questioning of a suspect;
- gathering evidence;
- to take steps to clarify the circumstances of the case.
The Familienkasse may also, at any stage of the proceedings, refer the case to the public prosecutor’s office or apply for a penalty order (Strafbefehl). The public prosecutor’s office, for its part, is authorised to take over the proceedings at any time. Where the proceedings are conducted by the public prosecutor’s office, the Familienkasse generally has powers and duties corresponding to those of the police, in accordance with Section 402 of the Abgabenordnung.
It is therefore worth bearing in mind that correspondence with the Familienkasse may concern not only the entitlement to benefits itself, but also separate matters relating to criminal tax liability.
You can also read more about the issues arising from the coordination of family benefits in our article: Attendance allowance and Kindergeld and EU coordination.
4. The limitation period for criminal tax proceedings in the Kindergeld case
Another important issue is the limitation period for criminal fiscal liability. In the case of offences specified in Section 370(1)(1) of the Tax Ordinance, the limitation period is, as a general rule, five years. This period is calculated from the date on which the offence was committed.
To put it simply, it can be assumed that, in a typical case where false information has been provided in a Kindergeld claim, the five-year limitation period runs from the date of the last benefit payment received without justification. However, this does not mean that, in every case, the expiry of five years automatically precludes further prosecution.
Does the initiation of criminal tax proceedings interrupt the limitation period?
Certain actions taken in the course of proceedings may result in the interruption of the limitation period. For example, the service of a notice on a suspect informing them of the commencement of a pre-trial investigation may result in the interruption of the existing limitation period. In such a situation, the limitation period begins to run afresh.
In practice, this may mean that, in the case described, prosecution will be possible not for five, but for as long as ten years after the offence was committed; that is, in the example given, from the date of the last Kindergeld payment received unduly. However, the issue of the limitation period requires an analysis of the circumstances of each individual case, including the procedural steps taken by the authorities.
In the context of entitlement to German family benefits, it is also worth reading the following publication: Child benefit – what you need to know if you work in Germany and your child lives in Poland.
5. How can you defend yourself against allegations of having received Kindergeld to which you were not entitled?
The initiation of criminal tax proceedings in connection with Kindergeld does not mean that the suspect’s liability has already been established. A key part of preparing a defence is to establish precisely what the alleged irregularity consists of.
What should be analysed first?
The following questions are of particular importance:
- Which specific piece of information provided in the application was incorrect or incomplete?
- When was it handed over?
- Who was it handed over to?
- Did it relate to a circumstance relevant to entitlement to Kindergeld?
- How did this affect the decision regarding the benefit and the resulting claim for payment?
- Did the person concerned act intentionally?
The mere assertion that the application contained incorrect information or that an undue benefit was received is not sufficient to establish criminal fiscal liability under the provision in question. It is also important to establish what the applicant knew at the time.
Could a lack of knowledge of the German rules on Kindergeld be relevant?
Case law from German courts does not require a suspect to be aware of the exact wording of a provision, the correct tax classification or the technical method of calculating the benefit. It may be sufficient for a non-lawyer to understand that a particular circumstance is relevant to entitlement to Kindergeld, and that misrepresenting it may lead to the payment of a benefit to which the person is not entitled.
If, on the other hand, the person in question was aware of all the relevant facts but believed that they were nevertheless entitled to receive Kindergeld, the issue of a mistake as to unlawfulness (Verbotsirrtum) may arise. This issue is governed by Section 17 of the German Criminal Code (Strafgesetzbuch – StGB). Under this provision, a mistake as to the unlawfulness of an act precludes culpability if it was unavoidable. If, however, it could have been avoided, it may lead to a reduction in the penalty.
These are, of course, not the only circumstances that may be relevant to the chosen line of defence.
Criminal tax liability in cases concerning Kindergeld always requires an assessment of the specific factual and legal circumstances.
FAQ – frequently asked questions about Kindergeld refunds and criminal liability
Does a Kindergeld refund constitute tax fraud?
No. A decision to withdraw the benefit and order its repayment does not amount to a finding that a criminal offence has been committed. Proceedings concerning the repayment of Kindergeld and criminal tax proceedings are distinct in nature.
Can the Familienkasse conduct criminal tax proceedings?
Yes. Within the scope of its powers, the Familienkasse may carry out investigations, gather evidence and question the suspect. The case may also be referred to the public prosecutor’s office.
Does providing incorrect information on a Kindergeld application automatically result in criminal liability?
No. In the case of Section 370(1)(1) of the Tax Code, it is necessary to establish the grounds for liability, including the intentional nature of the act and the link between the provision of incorrect information and the obtaining of an unjustified tax advantage.
After how many years does the limitation period for criminal tax proceedings relating to Kindergeld expire?
In the case of offences under Section 370(1)(1) of the Tax Ordinance, the basic limitation period is, as a rule, five years. However, certain procedural steps may interrupt the running of this period, which affects the possibility of further prosecution.
Is it possible to defend oneself against allegations relating to Kindergeld?
Yes. The basis for preparing a defence strategy is an analysis of the circumstances of the case, in particular the content of the information provided, its relevance to the entitlement to benefits, the causal link and the intent behind the act. Circumstances relating to a mistake as to the unlawfulness of the act may also be relevant.
Do you have any queries regarding a Kindergeld refund or criminal tax proceedings in Germany?
Contact us, to discuss your situation, analyse the documents you have received and consider possible lines of defence.
Legal status: November 2026. This article is for general information purposes only and does not constitute individual legal or tax advice or an opinion. The information provided relates to general legal issues and does not take into account the circumstances of any specific case. Before making any decisions based on this information, you should verify the current legal situation and analyse your individual circumstances, seeking professional legal advice where necessary. Although every effort has been made to ensure the accuracy of this publication, changes to legislation, case law or the practice of their application may affect the validity of the information provided.
