Bundestag adopts regulations on reporting obligations for digital platforms and reform of tax audits

On 10 November 2022 the Bundestag approved the bill submitted by the Federal Government to implement Council Directive (EU) 2021/514 of 22 March 2021 amending Directive 2011/16/EU on administrative cooperation in the field of taxation and modernising tax procedural law (20/3436, 20/4228).

In doing so, the Bundestag followed the resolution recommendation of the Finance Committee of 09 November 2022 (20/4376).

Background

The operators of digital platforms are to be obliged to report to the Federal Central Tax Office information which will allow both an identification of the providers active on the platforms as well as an assessment of their transactions for tax purposes. Providers from Germany as well as from other EU member states would be obliged to report. For this purpose, an automatic exchange of information between the competent authorities in the EU member states is also being planned.

Furthermore, the law provides for changes in the conduct of tax audits. Such tax audits are to be carried out more promptly and at an accelerated pace.

Changes include:

• Opportunity to apply for information on the scope of application of the Platform Tax Transparency Act.

• Changes to the EU Administrative Assistance Act, the Automatic Transmission of Information, the Tax Authorities Act, the Duties of the Federal Central Tax Office.

• Suspension of the running of the time limit for issuing tax assessments:

The suspension of the running of the time limit (at which time tax claims become statute-barred) - in cases where notice of a tax audit has been given - is to be limited to five years from the end of the calendar year in which the notice of the tax audit was served (draft Section 171 (4) Sentence 2 General Tax Code). The announcement of the audit order is to mark the beginning of the calculation of the five-year period. Various exceptions to the limitation are also provided.

• Special partial tax assessments during a tax audit:

The new draft Section 180 (1a) General Tax Code is intended to allow the issuing of partial tax assessments whilst the tax audit is still running. This is intended to provide taxpayers with legal certainty at an early stage.

• Changes to the qualified cooperation request:

The new draft of Section 200a General Tax Code contains regulations on qualified cooperation requests within the scope of a tax audit in the form of an enforceable administrative act with special legal consequences in the event of non-compliance.

• Amended regulations on the entry into force and application of the amendments to the General Tax Code and extended testing of alternative audit methods.

Source:

Bundestag, online.