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In practice, cross-border business activities between Germany and Switzerland involve numerous tax and customs issues. Errors often arise not because of a lack of specialist knowledge, but due to the complex interfaces between different types of taxes, processes and organisational units. A structured VAT and customs health check creates transparency, identifies risks early and points out specific potential for optimisation – before any issues arise with tax or customs authorities.

The planned restriction of immunity from prosecution through voluntary disclosure under section 371 of the German Fiscal Code (Abgabenordnung – AO) marks a fundamental shift in tax criminal law. Not only private individuals, but businesses as well, may lose a key instrument for addressing tax risks through full disclosure. In future, depending on the amount of tax evaded, voluntary disclosure would no longer lead to immunity from prosecution, but would merely have a mitigating effect on sentencing. This reform would significantly increase the pressure on businesses and reinforce the need for early, reliable risk identification, as well as a realignment of tax and defence strategies.

Digital business models and IT-enabled processes play a key role today in being successful in business. And the regulatory requirements are constantly increasing at the same time – particularly in data protection law, cyber security and in the use of artificial intelligence (AI).

On paper, tax processes often appear clearly structured and well documented. However, operational reality frequently reveals a different picture: divergences in data flows, system logic, and interfaces are common in complex system landscapes.

The Federal Ministry of Finance has published the draft of the new Tax Audit Regulations. These are to replace the current tax audit regulations and place a stronger focus on risk-based audits, faster proceedings and more duties on companies to cooperate.

Businesses may face serious risks in criminal tax law after the Federal Court of Justice (BGH) ruled on 10 December 2025 (1 StR 387/25) to change its previous case law. Incorrect preliminary VAT returns and a related incorrect annual return no longer count as a single offence. Instead, the offences stand next to each other and are to be evaluated under criminal law separately. This results in a considerable tightening of the legal consequences to taxpayers and all those involved in the preparation and submission of preliminary VAT returns and annual returns.

Employment and social security law risks often arise not from isolated errors, but from unclear responsibilities, evolved processes and a lack of coordination between HR, payroll, specialist departments and external service providers. The consequences range from significant back payments to personal liability risks for managing directors and other responsible corporate bodies.

Part 2 of our four-part Health Check series: A Wage Tax Health Check helps companies identify typical tax risks at an early stage and review internal processes. Errors frequently arise in areas such as entertainment expenses, company events, gifts, or the private use of company cars and e-bikes – often due to unclear responsibilities or missing data flows between departments. A structured Health Check creates transparency, identifies optimization potential and better prepares companies for wage tax audits.

International trade flows are becoming increasingly complex due to new regulations such as CBAM, preferential trade agreements and additional compliance requirements. The Customs Health Check creates transparency, identifies risks at an early stage and lays the foundation for secure and controllable customs-related processes.

Part 1 of our four-part Health Check series: Why a (VAT) Health Check can deliver value for your organization and why it should include interface issues with other tax types (combined Health Check).

In a circular dated December 29, 2025, the Federal Ministry of Finance announced changes to fields in, among other things, the • 2026 advance VAT return • 2026 yearly VAT return • special advance payment of VAT for 2026 • income tax return 2025.

From 1 January 2026 the reduced rate of 7 percent applies again to food, while beverages continue to be taxed at 19 percent. This change not only affects restaurants, but also canteens, food-trucks and event catering. For businesses this means that prices, cash register systems and processes have to be updated on time. The risks of errors and liability are particularly high at the turn of the year and in handling vouchers.

The European Court of Justice (ECJ) has clarified that tooling supplies, as they are known, are to be considered distinctly for VAT treatment and are not automatically an ancillary supply to the supply of parts, especially if the goods are not supplied in the same way. The judgement therefore has a crucial effect on the automotive and supplier industry and a direct impact on contract drafting, invoicing and input tax deduction.

In its letter on 8 August 2025, the Federal Ministry of Finance (BMF) clarified the classification of revenue from online event services in cases where services are combined. The VAT Application Decree (AEAO) has been adapted and expanded accordingly. In addition to this specification, the Federal Ministry of Finance has also dealt with when the scope of this provision is to apply. This letter completely replaces the letter dated 29 April 2024.

The tax authorities have currently got their sights on influencers – will this be followed by a second wave, with the focus moving from the influencers to the companies they collaborate with? Is your company prepared for this second wave and does your influencer marketing comply with tax and social insurance requirements? It can be expected that sponsoring and incentives will again also be closely examined.

Tax compliance is more than just a legal obligation – it protects a company and its management from unexpected risks and fines, or even reputational damage. Innovative tools and queries as part of a thoroughly designed TCF can help companies stay on the safe side in the future. In many situations, risks such as bogus self-employment and incentives can be quickly and accurately identified using innovative tools and queries and directly allocated to risk categories to minimize – if not fully mitigate, negative outcomes.