tax audit

noun · Außenprüfung

The statutory term is Außenprüfung, and practice says Betriebsprüfung for the same thing. It opens with a Prüfungsanordnung, an administrative act carrying its own right of appeal, and its most consequential side effect is procedural: once the audit has begun, the limitation period for assessing the years under audit stops running, so the tax office keeps them open.

Which translation, when

Prüfungsanordnunghow it starts: the tax office determines the scope of the audit in a written or electronic order with instructions on the available remedy, and the order, the expected starting date and the names of the auditors are notified to the taxpayer a reasonable time before the audit begins unless notification would frustrate its purpose; the taxpayer may waive that period and may ask for postponement on important grounds.

Ablauf und Abschlusswhat happens: the audit runs on statutory duties of cooperation, ends as a rule with a Schlussbesprechung in which the disputed facts, the legal assessment of the findings and their tax consequences are discussed, and produces a written Prüfungsbericht; the closing meeting may be dispensed with where nothing changes or the taxpayer waives it, and where a criminal or administrative fine procedure may follow, the taxpayer is to be told that this is reserved to a separate procedure.

Ablaufhemmungthe trap for the calendar: the beginning of an audit suspends the running of the assessment period for the taxes covered by it, so years that would otherwise have become final stay open until the resulting notices are unappealable or three months have passed since notice that the audit changed nothing; the suspension fails where the audit is interrupted immediately after it began for more than six months on grounds the office answers for, and it ends in any event five years after the close of the calendar year in which the audit order was notified; the period itself belongs to the limitation of assessment entry.

Why

Tax audit is the Außenprüfung, the name the Fiscal Code uses, while practitioners and clients say Betriebsprüfung and the two are used interchangeably; a translation may keep either, but should not invent a third. The audit is admissible without special grounds against taxpayers who run a commercial or agricultural business, who are self-employed in a profession and against those subject to the extended record-keeping duties, and against other taxpayers only in defined situations, so an ordinary employee is not routinely audited. It begins formally with the Prüfungsanordnung: the office fixes the scope in a written or electronic order carrying instructions on the available remedy, which makes the order itself an administrative act that can be challenged, and notifies it together with the expected start and the names of the auditors a reasonable time in advance unless that would defeat the purpose. The taxpayer can waive the notice period and can apply to have the start postponed on important grounds. Conduct of the audit rests on statutory duties of cooperation, and it closes with two documents an English reader should not confuse: the Schlussbesprechung, a meeting at which disputed facts, the legal assessment of the findings and their tax consequences are discussed, and the Prüfungsbericht, the written report. What makes the audit decisive for the calendar is the suspension it triggers. Once the audit has begun, the assessment period for the taxes it covers stops running until the notices issued on the findings can no longer be challenged, so years that looked closed reopen. That suspension is not open-ended: it fails altogether where the audit is interrupted immediately after starting for more than six months on grounds the office answers for, it also ends three months after notice that the audit produced no change, and it stops at the latest five years after the close of the calendar year in which the audit order was notified, a ceiling that gives a taxpayer facing a long-running audit a date to work towards. The limitation rules themselves are held by the limitation of assessment entry.

Typical mistakes

The Prüfungsanordnung is an administrative act with its own remedy, so treating the start of an audit as an informal step overlooks the point at which its scope can be challenged.
The beginning of an audit suspends the assessment period for the years covered, so assuming those years are closed after the ordinary period misstates the position.
Schlussbesprechung and Prüfungsbericht are separate steps, so merging them into one closing document loses the taxpayer’s opportunity to argue before the report is written.

What matters

Guiding a foreign group through a German audit: the note should call it Außenprüfung, treat the Prüfungsanordnung as a challengeable act defining the scope, and warn that the audit keeps the audited years open beyond the ordinary period.

Authority

§ 193 AO
§ 196 AO
§ 201 AO
§ 202 AO

What the machine misses

Machine output for tax audit gives Steuerprüfung or Steueraudit, neither of which the Fiscal Code uses, and the statutory term is the Außenprüfung, opened by a challengeable Prüfungsanordnung and closing with Schlussbesprechung and Prüfungsbericht; the loose word also hides that the audit suspends the assessment period for the years it covers.

See what the machine does with this clause →

Examples

a tax audit	eine Außenprüfung
the audit order	die Prüfungsanordnung
the closing meeting	die Schlussbesprechung
the audit report	der Prüfungsbericht