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Article 3 of the Seventh Regulation Amending Tax Regulations expands the Digital Payroll Interface (Digitale Lohnschnittstelle–DLS). In future, employers are not only to prepare standard payroll data digitally but also the data determined and used for this purpose used by upstream and ancillary systems. The tax authorities’ goal is understandable. In practice, however, the change will throw up considerable technical, organisational and data protection questions. This new version of section 4(2a) of the Income Tax Implementing Regulation (Lohnsteuer-Durchführungsverordnung–LStDV) applies to the data recorded in payroll accounts from 1 January 2027.

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.

The introduction of a Tax Compliance Management System (Tax CMS) is often a complex project. In practice, there are various pitfalls: for example, different priorities, scarce resources and technical hurdles. To successfully master these pitfalls, corresponding experience from comparable projects is required.