What is a tax audit?
A tax audit (Betriebsprüfung), also called an external audit (Außenprüfung), is a review by the tax office that checks a company's tax information for accuracy and completeness. The aim is to make sure taxes were calculated and paid correctly.
The audit can cover various areas, including:
- Cash-basis income statement (Einnahmen-Überschuss-Rechnung) or balance sheet
- VAT, wage tax and trade tax
- Proper bookkeeping and documentation
An audit can also be carried out by the German Pension Insurance (Deutsche Rentenversicherung). This audit checks a company's social security information for accuracy and completeness. The aim is to make sure social security contributions were calculated and paid correctly.
- Payslips and payroll records
- Contribution notifications and contribution statements
- Financial accounting related to wage payments
- Assessment of employment relationships (for example false self-employment)
- Calculation of levies (for example under the Expense Compensation Act, Aufwendungsausgleichsgesetz)
When do audits take place?
Audits usually take place at regular intervals, depending on the size of the company and the industry. An audit can also be ordered if there are irregularities, such as unusual tax returns. Smaller companies are usually audited less often than large ones or those with complex structures.
How to prepare for the tax audit
- Have all documents ready Good documentation is essential. Make sure all relevant documents are complete and in order,
for example:
- Accounting records
- Tax returns and tax assessments
- Contracts and invoices
- Payroll records etc.
A structured overview saves time and makes a professional impression.
- Use digital tools Many companies today work with digital accounting systems. These make it quick and easy to provide all relevant data. Make sure the systems are GoBD-compliant (German principles for the proper keeping and retention of books and records).
- Talk to your advisor early For complex matters, it can make sense to talk to your tax advisor early. This lets you clear up any open questions in advance and make sure all information is correct.
- Inform your staff Especially for a wage tax audit, the staff involved need to know about the audit and their role in the process. This lets them answer the auditor's questions quickly and avoids misunderstandings.
- On site or digital? Clarify in advance whether the audit will take place on site at your company or digitally. For a digital audit, you can prepare to send the data electronically.
What if there are discrepancies?
If the audit uncovers irregularities, it is important to stay calm. Resolve the open points together with your tax advisor and make sure any misunderstandings are cleared up quickly.
Conclusion
A tax audit need not be a cause for concern. With proper bookkeeping, clear communication and support from tax professionals, you can handle the process with confidence. See the audit as a chance to improve your own processes and make them even more efficient in future. Good preparation is the key to a positive outcome. With it, you can face the tax audit calmly.
