by Peter L Pedersen, management consultant (www.tutor.de) and Johannes Fiala, lawyer (www.fiala.de)
Not a carefree package from the legislature:
Several heads of financial services associations have taken the lawmakers‘ delays by the change of government in their stride. Proudly it is announced that by a new BMF letter of 25.11.2005 the situation was defused up to beyond 01.01.2006. Associations tell a lot when the day is long. The realities are different.
Confidential information on the audit:
The bosses of the tax audit sit with the Oberfinanzdirektion (OFD), to them the tax offices are subordinate. The new target clientele ?the financial service providers? is already in the sights of the auditors and investigators. Who reads the essays in the technical periodicals for Steuerrechtler, knows also, from which the wind blows with the decision makers of the OFD. A phone call is enough to make sure: ‚We are of course enforcing the law‘.
When asked about the significance of the BMF letters of 25.11.2005 and 30.05.2005, it is emphasised that this only concerns a small aspect of the activity. A distinction must be made between the various areas, such as insurance brokerage, brokerage of closed-end investments or funds, activity as a tipster, etc.
For the rest, the law ? and that’s what we’re gonna do:
But what do these words want to tell us? Quite simply: Even for the past ! the tax office goes in search of facts or cases in which the VAT should have been declared and paid.
Since 2002 it has become easier for the tax authorities ? the VAT auditor no longer has to register, he simply stands in front of the door and can look at the receipts immediately. Management consultant Pedersen therefore recommends: „Ask your tax advisor specifically how your personal VAT liability stands. Since the problem of turnover tax has been circulating in the market for years, he will certainly have already given you appropriate recommendations for action in the past?
In practice, we also experience special cases in which office and marketing subsidies were received, which – regardless of whether they were defined as turnover-dependent or ?independent? – were declared by the responsible tax office as subject to turnover tax.
Even with the marketing grant from an insurance company or any level of distribution, the same problem arises ? even though cases like this like to be taken to court. A suspension of enforcement, i.e. a deferral of payment (if necessary also against payment of interest, as a deferral), rarely exists in this case.
Eyes closed and through ? or the broker’s certain bankruptcy?
The invoice of the auditor from the tax office then reads as follows: 10 years ago you would have had to pay 10,000 euros in VAT, plus 1% ?penalty interest per month? equals 24,400 euros; 9 years ago you would have had to pay ? The auditor adds up ? the financial service provider thinks of insolvency proceedings: But unfortunately, in the case of ?tort, tax evasion, etc.? there is regularly no exemption from debts in connection with criminal conduct.
And the auditor can audit back 10 years?:
If there is tax evasion involved, it goes back 10 years ? for the rest, only five years. Mediator V tries to negotiate with the examiner ? it had been put by different editors something completely different into the public.
The auditor counters: ‚Yes, what do you think tax consultants are for? You could also have asked the tax office for a binding answer?
An example from practice. Agent V receives mail from the Hamburg tax office. The tax office has audited a ship fund ? now it’s about payments as ?kick-backs? to customers and commissions to ?sub-brokers? Can both trigger VAT ?
Professionals instead of carelessness:
We can only warn against so-called experts without practical experience. All-clear statements in press releases and the trade press are absolutely beside the point. The professionals ask the tax office ? or have an accountant do it. There are financial service providers who have been paying VAT (not on everything) for decades ? for these well-trained and well-advised market participants, there is then no threat of a debt trap caused by a special VAT audit.
by the way, you can also escape the penalty, which is added to the above „interest“, by making a voluntary disclosure. Tax profits ? it can also be a little more !
A surefire way to contribute to the rehabilitation of the federal budget is the case that your accounting is „discarded“. Then the profit will be estimated by the tax office, perhaps at first on the two- or threefold, § 162 AO.
Since 01.01.2002, the accounting of the financial service provider must also comply with the ?GdPDU? (cf.www.elektronische-steuerprüfung.de). Surely you already have a special accounting solution or receive from your tax advisor since 01.01.2002 an accounting with ?IDEA-testable? data?
What every financial advisor should be aware of is the danger he puts himself in by not acting: If, in the event of an external VAT audit, it is established that he is liable for VAT, he will of course have the right to appeal and take legal action. This recommendation will also be made by the tax advisor of personal choice. However, five years may well elapse before a final decision is reached. In this time the taxpayer must live each day on ?s new with the uncertainty that perhaps retroactively horrendous tax arrears payments come on it. This psychological pressure might not pass without trace with many entrepreneurs and affect the daily business lastingly. Because, the taxpayer can ask himself every day anew: does it still make sense to go to the office if I lose the case?
In this respect, TUTOR boss Pedersen recommends: prevention is better than cure, because the latter can only go wrong. Lawyer Fiala follows up: It can secure itself each mediator and each selling at least regarding the criminal law, because there is the instrument of the ?obligatory information of the finance? also in uncertain cases, also around clarity in the files to possess. Carsten Lucht explains the handling of its FinanzFachOffice registered association: ?All super commissions are booked inclusive value added taxes. This offers every intermediary partner and cooperative a pronounced security in terms of sales tax.
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Über den Autor
Dr. Johannes Fiala ist seit mehr als 25 Jahren als Jurist und Rechtsanwalt mit eigener Kanzlei in München tätig. Er beschäftigt sich unter anderem intensiv mit den Themen Immobilienwirtschaft, Finanzrecht sowie Steuer- und Versicherungsrecht. Die zahlreichen Stationen seines beruflichen Werdegangs ermöglichen es ihm, für seine Mandanten ganzheitlich beratend und im Streitfall juristisch tätig zu werden.
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