New attempt to standardize the export of tax data
With the draft law on the implementation of Council Directive (EU) 2021/514 of March 22, 2021, amending Directive 2011/16/EU on administrative cooperation in the field of taxation and modernizing tax procedural law, the Federal Ministry of Finance would like to "lend a hand" to the external audit. Specifically, a uniform digital interface and data set description to be implemented by the taxpayer is intended to significantly simplify and accelerate the export and (automated) audit of data subject to retention or tax-relevant data for the tax authorities. The proposal for a German SAF-T (Standard Audit File Tax) is not new. Not so long ago, in the Annual Tax Act 2020 to be precise, the introduction of Section 147b of the German Fiscal Code (AO) failed, primarily due to resistance from the business community and various associations. Whether the new wording will now convince the business community remains to be seen. Two points are likely to be decisive in this respect: First, the standardization should not only relieve the financial administration, but also the economy. Secondly, the standard to be established would also have to leverage automation potential in the company; for example, by enabling data to be processed and evaluated without media discontinuity and thus more easily.
But now the planned change in detail: According to§ 147b AO-E the Federal Ministry of Finance is to be authorized to determine, by statutory order, a uniform digital interface and data record description for the standardized export of data subject to retention requirements. The statutory order may also specify an obligation to implement and use the respective uniform digital interface or data set description for the standardized export of data. The Federal Ministry of Finance thus appears to have responded to the criticism of the business associations regarding the original wording of Section 147b AO-E in the version of the Annual Tax Act 2020. The authorization to introduce "standardized storage of data", which was still anchored in the wording at the time and which was vehemently criticized, is no longer included in the current draft version. This should have alleviated the business community's concern that the financial administration will fix data processing systems and data structures to a specific technology, architecture or state of the art "until further notice" by means of a legal ordinance, the enactment of which, incidentally, is no longer subject to parliamentary control. It remains to be seen whether the associations and the business community will welcome an authorization to define a standardization of data export by the tax authorities (without influencing business practice), especially after the rather mixed experiences in the area of cash register systems. In particular, it will have to be clarified which tax-relevant data is covered by the obligation to export in a standardized manner. Electronic documents, such as accounting vouchers, invoices or business letters in electronic form, should certainly be excluded from this. It is also questionable how a uniform interface is to be found in the case of preliminary and ancillary systems, most of which were created according to the individual needs of the companies.
Much more explosive than the new provision of § 147b AO-E itself, however, could be the proposed new version of the§ 158 AO-E be discussed. § Section 158 AO regulates the probative value of accounting; in short, whether the accounting in question is to be used as a basis for taxation or whether the tax authorities are granted powers of estimation to determine the taxable base on the basis of certain lapses in accounting. According to the new version of Section 158 AO-E, the taxpayer's books and records are not to be used as a basis for taxation if the electronic data are not made available in accordance with the standard digital interface of Section 147b AO in conjunction with the relevant statutory instrument. In this respect, the tax authorities would be granted powers of estimation, even if the accounting in question should formally comply with the other regularity criteria pursuant to Sections 140 to 148 AO and only the (technical) export of the data via the uniform digital interface is lacking. Incidentally: In the future, this sharp sword of the power of estimation should not only affect the uniform digital data interface according to Section 147b AO-E, but also misconduct with the already existing digital payroll interface (DLS) and the so-called DSFinV-K, i.e. the uniform digital interface when using electronic cash register systems. Whether the business associations will welcome this new regulation is anything but to be expected in view of the complexity of the (technical) implementation of a uniform digital interface in the company that exists anyway and the heterogeneity of the systems and data landscapes used in the German economy.
Another planned change in the draft law can be seen as a real relief for all companies that use cloud applications and/or cloud archive solutions whose data or data centers are located outside the European Union. The previous obligation to apply for the transfer of accounting to a third country, as regulated in Section 146 (2b) AO, stipulates that the taxpayer must inform the tax authority of the specific server location and the name and addresses of the operator of the data processing system as part of the application. According to§ Section 146 (2b) AO-E the naming of the specific server location is to be omitted in the future. It will be sufficient to provide the name and address of the operator of the cloud solution. This change is certainly more than welcome. This is precisely because cloud providers do not regularly disclose the specific server location (location and street) for security reasons and it has thus been de facto impossible for the taxpayer to specify this to the tax authorities.
Finally, the draft bill also contains a change in the area of so-called data access (Section 147 (6) AO), which is certainly to be welcomed. In addition to a restructuring of the provision, which replaces the previously only limitedly apparent demarcation of the types of access (Z1 to Z3) with a transparent structure, the Z3 access is to be classified according to§ Section 147 (6) AO-E in future no longer be limited to data transfer via data carriers (e.g. DVD, USB stick or hard disks). The planned open formulation that "the data" must simply be "transferred" to the tax authority now lays the legal foundation (long overdue) for providing tax data via commercial data exchange platforms as well.
The bottom line is that the introduction of a uniform digital interface for the export of tax-relevant data for auditing purposes remains an exciting issue. It is difficult to estimate what influence the trade associations will be able to exert in the legislative process this time. Despite all the justified objections from the business community, one thing should not be lost sight of: In times of scarce personnel resources, it is almost unavoidable from an administrative perspective to automate tax audit processes as well. In addition, a standardized tax data interface can also represent an opportunity for companies to process and evaluate their own tax data in the future with less effort than before. For this reason, the technical definition of the uniform digital interface and the content-related data schema on which the export is based should be developed in close consultation with the trade associations.