Section taxation
The term section taxation is a principle from German tax law , according to which the tax bases are always determined based on regular time periods. The calendar or business year , quarter or month can be considered.
The principle can be found above all in sales tax , income taxes and balance sheet tax law . The underlying idea is that only sales , income and profits from the respective section are subject to taxation.
Section taxation is of particular importance with regard to the legal assessment of tax-relevant matters. Because each assessment period has to be assessed individually, there are generally no cross-period ties to the legal assessment in a previous period.
The (incorrect) recognition of tax-reducing facts in previous years does not bind the tax authorities for the future even if these facts have been recognized over several assessment periods. The objection that non-recognition violates the principle of good faith is not valid because of the principle of section taxation and the associated constant legal reassessment of the underlying facts.
An exception for a commitment with regard to the tax treatment over several periods is only possible through a chargeable binding information according to § 89 Abs. 2 AO given.
