New ban for the tax office during tax audits

The Federal Ministry of Finance has issued a clear statement: tax auditors are not allowed to make estimates without further ado. Especially not in times of crisis

The Federal Ministry of Finance has published the new guidelines for the tax office: the 2021 collection of standard rates, which sets out the rules for tax audits and estimates. This comes every year, but this time it’s different – it’s never been done before. The Federal Ministry of Finance is instructing the tax offices:

The tax office must handle the estimate sensitively.

This applies in particular to the so-called guideline rate estimates. These are based on the so-called guideline rate collection, which the Federal Ministry of Finance publishes once a year. This contains the range of guideline rates that the tax office can add to cash-intensive businesses. For example, if the auditor finds errors in the bookkeeping or errors in the cash book.

The Federal Ministry of Finance points out the following in a letter accompanying the current guideline rate collection, which did not yet exist in this form:

In times of crisis such as corona, the Ukraine war and the energy crisis, the tax office must approach estimates with a sense of proportion.

Therefore, a blanket additional estimate is out of the question. Instead, the tax office must always take into account the specifics of the individual business. This applies both against the background of the case law of the Federal Fiscal Court, which has clearly ruled:

Any additional estimate must be coherent, economically reasonable and be achievable by the audited company in the first place.

However, this also applies against the backdrop of the slump in sales that companies are having to shoulder as a result of the coronavirus crisis, the war in Ukraine and the energy crisis. It is precisely this crucial aspect that the Federal Ministry of Finance is now clarifying.

The guideline rates are therefore no more but also no less than a reference point for the tax office to estimate turnover and profit during the tax audit. In times of crisis, this estimate should at best be based on the lower end of the guideline rates, insofar as this can be achieved at all by the audited business.

This is intended to put a stop to the widespread practice of tax offices. This is because tax auditors tend to estimate at the upper end of the guideline rates. As part of settlement negotiations – the so-called deal during the tax audit – this maximum can then be corrected further downwards. However, the approach at the upper end of the estimate is often incorrect in times of crisis.

The clarification to this effect from the Federal Ministry of Finance therefore sets the course for tax audits in the coming years.

The following therefore currently applies: lodge an objection to all actions during the tax audit. Right from the start against the audit order. Right up to the questions from the auditor. And, of course, against the tax assessment notice after the audit.

⬇️ Get your objection to the tax audit here ⬇️