On 12 July 2022, the federal Ministry of Finance (BMF) published a draft bill on DAC7. This was approved on 10 November by the Bundestag.

Apart from implementing the DAC7 directive, this act also amends various passages in the German Fiscal Code (Abgabenordnung – AO), including the moving of accounting records. These changes will make things a lot simpler for businesses. Here are the details:

  • Naming the location of the system or the name and address of the commissioned third party:
    In future, it will only be necessary to name the primary location of the IT system or the name of the commissioned software operator and their address. Businesses will no longer have to give various details to the tax authorities (e.g., server location), as was the case up till now.
  • Moving accounting to different countries:
    In future, it will be possible to keep accounting records not only in one but in several member states of the European Union at the same time.
  • No mandatory transfer of accounting records back to Germany when changes are made:
    Taxpayers may in future transfer their accounting records from one EU member state directly to another. It will no longer be necessary to move them back to Germany first.
  • Cloud solutions and online storage should be permitted in future:
    The Fiscal Code is to be amended so that in future data may also be made available to the tax authorities via online storage and cloud services.
  • Introduction of data standards:
    The tax authorities are aiming to introduce data standards. In this way, it will be possible to scan standardised sets of data using the tax authorities’ software more quickly. A duty to implement and use uniform digital interfaces or descriptions of sets of data to allow data to be exported in a standardised manner will also be laid down in a regulation.
  • No presumption of accuracy if records do not meet the interface specifications:
    If the tax authorities specify digital interfaces, the records are to be made available according to the specifications of these interfaces. Otherwise, according to the new legal situation, examining the bookkeeping will be deemed difficult. The consequence of this would be that the presumption of accuracy would be lifted. This would mean that those taxpayers would then be obliged to prove the accuracy of their bookkeeping figures and if they cannot provide proof, the tax authorities would be given an authorisation to estimate the tax burden.

The changes to transferring accounting are to be applied to all procedures pending on 1 January 2023. If you have any questions, feel free to contact us!