Modernization and digitalization of the fight against undeclared work
- Patricia Lederer
- Jul 13
- 2 min read
Updated: Jul 13
What the new draft bill from the Federal Ministry of Finance means for companies and employers
Frankfurt am Main
July 13, 2025
On July 7, 2025, the Federal Ministry of Finance (BMF) presented the draft bill (RefE) for a law to modernize and digitize the fight against undeclared work. The goal is to make the customs administration's Financial Control of Undeclared Work (FKS) more future-proof and efficient.
Increasing efficiency through digitalization and automation
The new draft law proposes to legally enshrine the FKS's risk-oriented audit approach in Section 2 of the Act to Combat Undeclared Work (SchwarzArbG). In the future, FKS audits will be better prepared through automated data comparisons. This will enable the authority to systematically evaluate large amounts of data for risks of undeclared work and illegal employment and derive precise risk assessments from them (Sections 25 and 26 of the SchwarzArbG).
Expansion of the industry catalog
Particularly affected in the future will be the hairdressing and cosmetics industries, which will be included in the list of industries considered particularly vulnerable to undeclared work. This expands the focus of financial control to include additional economic sectors.
Improved testing and handling options
The draft proposes to strengthen the possibility of conducting official inspections and to improve the manageability of criminal and administrative law in combating illegal employment. Furthermore, investigations will be handled directly by the main customs offices to a greater extent in the future. The FKS's participation rights will also be expanded.
Significance for companies and employers
Companies and employers should prepare for these changes, as controls will be even more data-driven, targeted, and effective in the future. Timely preparation and advice can help identify risks early and avoid unnecessary sanctions.
TaxPro supports you if you suspect illegal work
With over 30 years of experience in tax and social security law, TaxPro provides companies with comprehensive advice on the risks and obligations associated with undeclared work and illegal employment. We support you during tax audits, assist with risk assessment, and assist in the legally compliant implementation of all requirements.
Further links
TaxPro tax law experts support you in the case of suspected undeclared work during the tax audit
