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), Germany Vice-President of the CFE St. Petersburg International Legal Forum 18 May 2012 in St. Petersburg

Referent: Dr. Herbert Becherer Seite 2 Avoidance and settlement of 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

Referent: Dr. Herbert Becherer Seite 3 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) Avoidance and settlement of tax disputes

Referent: Dr. Herbert Becherer Seite 4 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 Avoidance and settlement of tax disputes

Referent: Dr. Herbert Becherer Seite 5 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 Avoidance and settlement of tax disputes

Referent: Dr. Herbert Becherer Seite 6 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 Avoidance and settlement of tax disputes

Referent: Dr. Herbert Becherer Seite 7 4. Administrative appeal procedure  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) Avoidance and settlement of tax disputes

Referent: Dr. Herbert Becherer Seite 8 4. Administrative appeal procedure  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 Avoidance and settlement of tax disputes

Referent: Dr. Herbert Becherer Seite 9 4. Administrative appeal procedure  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. Avoidance and settlement of tax disputes

Referent: Dr. Herbert Becherer Seite 10 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) Avoidance and settlement of tax disputes

Referent: Dr. Herbert Becherer Seite 11 Thank you for your attention!