Control notification

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A control message is

  • a notification about a tax-relevant transaction (e.g. fee payments, interest credits)
    • one tax office to another tax office,
    • an authority or corporation under public law to a tax office.

A control notification serves to ensure a complete and proper tax recording of income. Control messages can be used to check whether a taxpayer has met his tax obligations.

General

Control notifications are often created during field audits when the tax auditor becomes aware of processes that are important for another taxpayer. In addition, information passed on to the tax office, such as when buying a car, property or house, is collected in a control message in the tax file of the person involved. In the case of high cash payments, illicit money may be suspected and the tax office will investigate further.

The Treasury's control system also extends to international capital movements and business deals. Through the intergovernmental exchange of certain information about their tax citizens, the withholding of interest income from financial investments abroad or the exploitation of unjustified advantages can have unpleasant consequences for the person concerned.

As a rule, the taxpayer does not know whether control reports have been received about him. A control notification is not an administrative act .

A control message implements the so-called correspondence principle .

Situation in Germany

External audit

In Section 194 (3 ) of the Tax Code (AO), the legislator has regulated that on the occasion of an external audit (also known as a "tax audit"), findings about third parties found at a taxpayer may be transmitted by the auditor by way of a control notification to the tax office responsible for them. It controls the tax situation of this other person / s.

However, an external audit that only serves the purpose of obtaining tax-relevant facts about third parties by way of control reports may not be ordered.

The drafting of control reports is at the discretion of the auditor. In general, he will only prepare it if he suspects tax-relevant issues. This restriction is based on a decision by the Federal Fiscal Court .

Since external audits serve to finally clarify the tax situation with this taxpayer, control reports contain so-called chance discoveries about legal or factual facts about third parties. It's no secret that auditors are aware when they look at the audited company's accounting records on expenses for

bump. Furthermore, payments to the private current account of a businessman or self-employed person , unusual international payments , large cash payments, atypically inexpensive deliveries of goods, valuable gifts in kind or other extras can be an occasion for control messages.

According to § 30a AO , auditors in credit institutions have to take into account the special relationship of trust with their customers. In exceptional cases, however, this does not protect against the forwarding of a control message if, in the assessment of the auditor, it is a significant tax-relevant matter.

Other sources of information

In addition to external audits, the tax offices also systematically evaluate information otherwise received by them by means of control reports. The following points illustrate these possibilities, but do not claim to be complete.

  • The tax office receives information about real estate transactions through a copy of the notarial deed for the purpose of calculating the real estate transfer tax . The income tax assessment office is informed internally. You can now check whether the buyer's money has been properly taxed and will pay attention to how the seller's proceeds are reflected in taxation, for example in higher interest income from investments .
  • The tax authorities are informed about deaths by notifications from the notary, the registry office , the credit institute or the insurer with regard to inheritance tax . If the testator has left large assets, the control notification is used to investigate whether the deceased has submitted plausible tax returns in the previous years .
  • For purposes of motor vehicle tax assessment that divides Admissions to the tax authorities with data. With the help of this control message, the tax officer tries to track down whether black money has been used in motor vehicle transactions by means of cash payment.
  • The tax office evaluates the classifieds section of the press. Box numbers are no obstacle to him. The Federal Fiscal Court approved many years ago that every newspaper publisher had to disclose the name and address of the advertiser when the tax investigation department discovered the advertisement for a foreign property of higher value and initially received no information. This practice is constitutional.
  • Other authorities and public broadcasters are obliged by the notification ordinance of September 7, 1993 (Federal Law Gazette 1993 I page 1554) to disclose certain payments to the responsible tax office.
  • The Federal Central Tax Office forwards information on foreign interest and capital income to the tax office.

Dissemination of information

  • In the Interest Information Ordinance, the German credit institutions are required to send control reports for certain interest income to the Federal Central Tax Office. The report is made annually and affects all bank customers residing in other EU countries. It reports interest income and proceeds from the sale of certain fixed income securities. The reports are forwarded to the tax authorities of the other European countries.
  • The tax offices are obliged under the Federal Training Assistance Act to send control notifications to the BaFöG offices. From the tax exemption order it came to light that some trainees had withheld assets.

Web links

Individual evidence

  1. ↑ BFH judgment of February 18, 1997 , Az. VIII R 33/95, BStBl. 1997 II p. 499.
  2. ↑ BFH judgment of November 4, 2003 , Az.VII R 28/01 pdf 56 KB.
  3. ↑ BFH judgment of October 29, 1986 , Az.VII R 82/85 pdf 59KB.
  4. ^ Federal Constitutional Court decision of April 6, 1989 , Az. 1 BvR 33/87 pdf 56 KB