PwC’s German offices searched in tax fraud investigation

PwC’s German headquarters in Frankfurt and its offices in four other cities in the country were searched on Tuesday in a far-reaching investigation of suspected aggravated tax fraud by current and former partners.

The raids, which also included the private homes of eight individuals, were disclosed in a press release from the Frankfurt General Prosecution office. Some 250 law enforcement officers across Germany took part in the action.

The prosecutors did not name the firm involved but people with knowledge of the details told the Financial Times that it was PwC. Süddeutsche Zeitung first reported the identity of the firm.

PwC is Germany’s largest audit firm, with €2.4bn in annual revenue, according to data from consultancy Lünendonk & Hossenfelder.

Prosecutors allege that between 2012 and 2017, certain partners ran a tax fraud scheme that embezzled some €11m of value added tax. The partners involved are accused of “untruthfully” labelling revenue generated from the firm’s clients in Germany as work done by its Swiss subsidiary.

“The involvement of the Swiss company is alleged to have had the sole purpose to disguise domestic advisory work and hence the evasion of value added tax,” the prosecutors said in a press release.

“Investigations by prosecutors do happen time and again,” PwC Germany told the, adding that it was “fully co-operating” with the law enforcement authorities. It declined to comment further on the prosecutor’s allegations.