Tax Audit

A tax audit (Betriebsprüfung), also referred to as an external audit, is a comprehensive review of a company's tax-relevant circumstances by the German tax office. Its legal basis lies in §§ 193 et seq. of the Fiscal Code (Abgabenordnung, AO) and the Audit Regulations (Betriebsprüfungsordnung).

The audit is announced by an audit order specifying its scope, the periods to be examined and the assigned auditor. Typically, several related taxes and assessment periods are reviewed simultaneously. The taxpayer is subject to extensive cooperation duties: providing documents, supplying information and – since the introduction of the digital audit – making electronic data available in compliance with the GoBD principles.

Tax audits frequently result in additional tax assessments, interest on back taxes and, in problematic cases, the initiation of criminal tax proceedings. Careful preparation, structured guidance through the audit process and a substantiated statement for the closing meeting can have a significant impact on the final tax burden. Where facts of criminal tax relevance emerge, an adviser experienced in criminal tax law should be involved without delay.