avoidance and settlement of tax disputes

Referent: Dr. Herbert Becherer Seite 1

Avoidance and settlement of tax disputes

Speaker: Dr. Herbert Becherer, Steuerberater (tax adviser)Vice-President of Bundessteuerberaterkammer (Federal Chamber of Tax Advisers), GermanyVice-President of the CFE

St. Petersburg International Legal Forum

18 May 2012 in St. Petersburg


Avoidance and settlementof tax disputes

1. Principals of the tax procedure

Compliance and equality of taxation

The tax authority investigates the facts ex officio principle (investigation principle)

The taxpayer has to co-operate (co-operation maxim)

Constitutional law prohibition on excessiveness

Right to be heard/fair hearing

Principle of the protection of legitimate expectations Principle of good faith


2. Unilateral voluntary agreement of the tax authority towards the taxpayer

Binding ruling (§ 89 General Fiscal Code)

Obtain reliable statements from tax authorities following a tax audit

(§§ 204 ff. General Fiscal Code)

„Lohnsteueranrufungsauskunft“ – request for information relating to wage tax (§ 42e Income Tax Act)



3. Actual settlement

Binds tax office and taxpayer under the following conditions:

No agreement in legal questions

In cases of difficult verification of the facts, only

Cases of estimate, valuation, future-oriented forecast

No result that is clearly incorrect

The involvement of an official authorized to take decisions is required



4. Administrative appeal procedure:

Appeal

Purpose and legal nature

Legal protection of the person who appeals

Self-control of the administration

Relief of tax courts



4. Administrative appeal procedure

Admissibility criteria for appeal

Admissibility to apply to tax authorities

Admissibility of the appeal

Right to object

Deadline

Form

Demand for legal protection




Appeal, no devolutive effect = no automatic suspension (§ 367 I General Fiscal Code)

Limited suspension of the appeal

(§ 361 I General Fiscal Code)

Suspension of execution (§ 361 II General Fiscal Code)

Suspension and stay of the proceedings (§ 363 General Fiscal Code)




Decision on the appeal

a) The tax office dismisses the appeal as inadmissible

b) The tax office dismisses the appeal as being unfounded

Requirement for written form and reasoning

Change for the worth possible, appeal may be withdrawn before




Decision on the appeal

c) Appeal admissible and justified in its entirety: The tax office provides help by withdrawing, modifying or cancelling – as applied – the contested administrative act.

d) Appeal admissible and partly justified: The tax office provides partial remedy by modifying or cancelling partly the contested administrative act.



5. Legal action

The decision on the appeal (cases a, b, d) may be litigated at the fiscal court.

Two instances in the tax courts: Tax Court (FG: Court of First instance) Federal Fiscal Court (BFH: Fiscal Supreme Court)



Thank you for your attention!

avoidance and settlement of tax disputes

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