VW accused of tax evasion by German prosecutors image

Tax evasion is yet another accusation brought to Volkswagen, as the owners of the affected cars benefited from unjustified tax incentives.

The “dieselgate” files are thickening from one day to another, as more accusations are being brought against Volkswagen. German prosecutors are already looking into the scandal, but now they are formally investigating tax evasion regarding the cheating scheme, said a spokesman for the prosecutor’s office in the northern German city of Braunschweig, near Volkswagen’s Wolfsburg headquarter.

A separate probe was necessary because the accusations involve other cars and other people, he said.The investigation focuses on five Volkswagen employees, with main focus on tax evasion, but it could also involve fraud, he added. “German prosecutors like these kinds of investigations,” commented Michael Kubiciel, a criminal law professor at the University of Cologne. “It’s easier to pursue charges under German tax law than under environmental protection rules.”

The customers who have trusted Volkswagen would not have to pay for the difference in taxes, the automaker said. The bill is adding up, 2 billion euros being estimated for the financial risk of cheating the emissions tests by VW, and that includes paying governments for missing tax revenue. The company is already expecting to pay around 6.7 billion euros for fixing the cars that are fitted with the illegal software. The checks will soon flow, as the European regulators have approved a software update for 2.0-litre engines and also it is expected to agree with a fix for the 1.6-litre units. Meanwhile, the recall plan submitted to the California Air Resources Board is waiting its approval.

Via Bloomberg