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Is your tax CMS fit for an audit by the tax authorities?

Since 01.01.2023, the tax authority can audit the effectiveness of a Tax CMS

As of 1 January 2023, the tax authorities are testing a new audit method and are allowed to check the effectiveness of a Tax Compliance Management System (Tax CMS) within the scope of an external audit. If the Tax CMS is effective, audit facilitations for the subsequent external audit will be granted upon application.

In the past, tax auditors sometimes requested Tax CMS documents from the audited companies at the beginning of an audit. With Art. 97 Section 38 Introductory Act to the Fiscal Code (Einführungsgesetz zur Abgabenordnung, EGAO), this procedure was put on a "legal footing". Within the scope of a tax audit, Tax CMS can be checked for their effectiveness and binding commitments for future audit relief can be made.

A Tax CMS is considered effective if there is no or only an unremarkable tax risk. For this a Tax CMS has to demonstrably fulfil the requirements of the jurisdiction and the tax authorities for proper organisation and supervision within the meaning of Section 130 Administrative Offences Act (Gesetz über Ordnungswidrigkeiten, OWiG).

Therefore, every company should have sufficient documentation of a Tax CMS that meets these requirements ready for the next tax audit. We will be happy to assist you in assessing whether these requirements are met and how any deficits can be eliminated.



Published: April 2023

Safe the Date!

Our experts Sandra Höfer-Grosjean and Volker Radermacher will provide more detailed information regardin this topic in our Webcast "Legal Update #6/2023" on 26 April 2023. Further information and registration details will follow soon.

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