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Volkswagen Now Facing Tax Evasion Probe Amid Emissions Cheating Saga

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German prosecutors are widening their investigation into Volkswagen amid the ongoing emissions cheating saga to include possible acts of tax evasion.

Birgit Seel, Braunschweig prosecutor, said that the investigation for tax evasion is focused on five employees of Volkswagen, whose identities were not disclosed to the public.

The tax probe will be taking a look at the tax breaks that the owners of the Volkswagen-made cars received for the supposed low-pollution vehicles. The owners could possibly not be qualified for the tax breaks, as the emissions of the vehicles were incorrectly reported.

Understating the emissions of the vehicles involved in the scandal would not have had an effect on the tax bill of Volkswagen itself. The owners of the affected vehicles, however, would have paid lower taxes in Germany compared to what they should have paid, as vehicles that cause more pollution cause their owners to be charged with higher taxes.

Under the law in Germany, companies could not be held accountable for criminal acts. Prosecutors will need to carry on investigations on specific individuals that are suspected to be responsible for the wrongdoing.

Seel did not state whether the five suspects in the tax evasion probe are the same people that have been implicated in the separate investigation focusing on Volkswagen's fraud in implementing the cheating software.

Volkswagen admitted that it manufactured 11 million diesel-powered vehicles outfitted with software that allowed them to cheat on nitrogen oxide tests. The software could detect if the tests were being carried out and lessen the nitrogen oxide being released by the vehicle. Once the tests are done, the vehicles would emit nitrogen oxide levels far beyond the allowed levels.

A spokesman for the car company said that Volkswagen is cooperating with the authorities regarding the new issue.

Volkswagen estimated that it will cost around $2.3 billion to reimburse governments in Europe which granted the tax breaks on vehicles that falsely claimed to emit low emissions levels.

In the United States, Volkswagen has recently posted full-page advertisements in almost 30 prominent newspapers in the country to continue to apologize for the scandal, looking to rebuild its deteriorating reputation.

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