How often do you exchange information with an auditor?

Communication with the tax office takes place at varying intervals depending on the type and scope of the tax obligations of a company or private individual. For most companies and self-employed people, contact with the tax office is regular because tax obligations have to be fulfilled continuously. In general, there are some typical scenarios in which regular or ad hoc communication is necessary:

1. Regular communication: tax returns and reports

• Monthly or quarterly:
  • Advance VAT returns (UStVA): If the company is liable for VAT, it must submit an advance VAT return to the tax office monthly or quarterly. The frequency of submission depends on the previous year’s turnover:
  • Monthly: If the previous year’s turnover was more than 100,000 euros.
  • Quarterly: If the previous year’s turnover was less than 100,000 euros.
  • Wage tax returns: In the case of wage tax liability (e.g. for companies with employees), the wage tax return must also be submitted monthly or quarterly in order to report the wage tax withheld from employees.
• Annual tax returns:
  • Income tax return (for private individuals and self-employed persons): Normally, the income tax return must be submitted by 31 July of the following year. In certain cases (e.g. tax advice), the deadline can also be extended.
  • Corporation tax return (for corporations): This return must also be submitted annually and relates to the determination of the corporation tax of a corporation.
  • Trade tax return: If the company is subject to trade tax, this declaration must also be submitted annually.
• Income tax (self-employment and freelancers): As a self-employed person or freelancer, you must regularly file an income tax return, which is done once a year.

2. Special cases and ad hoc exchanges

• Tax audits: During a tax audit (e.g. VAT or tax audit), the exchange with the tax office is intensive. In this case, the tax office will regularly request documents and information in order to check whether the tax returns are correct and whether there are any tax discrepancies. This may require more intensive exchange, often over a period of several months.
• Tax assessments and queries: After filing a tax return, the tax office sends a tax assessment that determines the calculated tax burden. It may happen that queries arise regarding the tax assessment, for example in the event of ambiguities or discrepancies. In such cases, it is necessary to exchange information with the tax office in order to clarify misunderstandings or to appeal the decision.
• Changes in tax legislation: When tax rules or regulations change (e.g. due to new tax laws, tax reforms or changes in VAT), it may be necessary to liaise with the tax office to ensure that all new regulations are being correctly applied.
• Refunds and advance payments: An exchange may also be necessary when dealing with refunds (e.g. overpaid tax) or advance payments to clarify the amount of advance payments or the distribution of tax burdens.

3. Annual financial statements and tax advice

• Annual financial statements and tax returns: In the context of annual financial statements and the associated tax returns (income tax, corporate tax, trade tax), there is an exchange with the tax office, particularly if there are questions about bookkeeping or tax planning. The exchange often takes place once a year when all tax documents and financial statements are available.
• Objection to tax assessments: If you do not agree with the tax assessment of the tax office (e.g. due to an incorrect tax calculation), you have the option of lodging an objection. In this case, the exchange with the tax office must be continued in order to clarify the matter and possibly achieve a correction of the assessment.

4. Ad hoc communication on special tax issues

• Enquiries and requests: In special cases or questions regarding tax jurisdiction or application, such as the deduction of business expenses, the depreciation of investments or the tax treatment of gifts or travel expenses, it may be necessary to contact the tax office directly to obtain clarity on the correct procedure.
• Advance inquiries (e.g. regarding value added tax): If there is uncertainty regarding the tax treatment of certain business transactions or legal issues (such as the application of value added tax to certain services or products), a preliminary inquiry can be made to the tax office to obtain binding information.

Conclusion:

• Regular communication with the tax office takes place through the submission of tax returns (annually) and monthly or quarterly tax returns (e.g. VAT, payroll tax).
• More intensive communication is required when it comes to tax audits, enquiries about tax assessments, changes to tax laws or special issues.
• The annual financial statements and the associated tax returns are another important event for regular exchanges with the tax office.
• Ad hoc exchanges may be necessary for special tax issues or in the case of appeals against tax assessments.

Overall, the frequency of communication with the tax office depends on the complexity of the tax obligations and whether special events or tax audits are pending.