Correspondence principle (tax law)
The principle of correspondence is a term from tax law . It means that the outflow of expenses for one taxpayer must lead to an inflow of income of the same amount for another taxpayer. The control notification is based on the correspondence principle , but also the designation request in the sense of § 160 Tax Code .
If the tax authority does not know the recipient of a payment or can determine it with its own means of investigation, it can ask the taxpayer to name the payee so that they can check whether he has taken the income into account to increase the tax. Thus, the designation request or a request for information precedes the sending of a control message.
If the tax authority determines in the course of an external audit that a taxpayer has made payments to another taxpayer and has taken them into account with a tax reduction, it sends a control message to the tax office of the payee in order to check whether this income has been taken into account with a tax increase.
