Tax & Legal

In a recent judgment, the Supreme Tax Court commented on the retention requirements when determining profits on an accrual accounting basis (Betriebsvermögensvergleich) and using an open cash register, the choice between several possible methods to estimate the tax base (Section 162 Fiscal Code), and the admissibility of an estimate based on the official collection of guiding reference values published by the Federal Ministry of Finance (MoF).

The Ministry of Finance (MoF) has published some information on the so-called transaction matrix pursuant to Section 90 (3) sentence 2 no. 1 Fiscal Code which requires taxpayers to keep records of the nature and the content of their business relationships within the meaning of Section 1 (4) of the Foreign Tax Act.

The Supreme Tax Court has held that the costs to be taken into account in calculating the provision for future record retention costs can include an interest allocation in respect of the financing costs of the facilities used.

The Supreme Tax Court has held that the provision for record retention costs should be based on an average remaining retention period of 5.5 years following the balance sheet date.