Provisionality (tax law)

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A provisional or provisional tax assessment within the meaning of Section 165 of the Tax Code is a tax assessment in which it is uncertain whether and to what extent the prerequisite for the occurrence of the tax liability has occurred. For this reason, despite the uncertainty about the origin of the tax liability, the provisional nature of the tax liability allows for a determination, as otherwise a non-determination would be disadvantageous for both the state and the taxpayer .


The provisionality refers to cases of legal or factual uncertainty. The uncertainty may only relate to the origin of the tax claim , but not to its assessment under tax law, i.e. H. facts such as life circumstances with tax consequences must be uncertain, but not their legal issues.

The Lower Saxony Finance Court has submitted the solidarity surcharge to the Federal Constitutional Court for review as part of the specific regulatory review. The Federal Ministry of Finance has therefore issued an instruction to only set the solidarity surcharge for assessment periods from 2005 onwards. The assessment is therefore provisional in accordance with Section 165 (1) sentence 2 no. 3 AO, as it is uncertain whether and to what extent the prerequisite for the tax liability to arise has occurred. In the present case, it is unclear whether the Solidarity Surcharge Act is compatible with higher-ranking law ( Basic Law ).
An entrepreneur sells e-books on the Internet. There is a dispute between the tax office and the entrepreneur as to whether the sales achieved comply with the standard tax rate in accordance with Section 12 (1) UStG or the reduced tax rate applies, since books as cultural goods are subject to the reduced tax rate of 7%. The prerequisites for the creation of the tax are not uncertain, since the tax claim arose beyond doubt ( § 38 AO, § 1 and § 13 UStG). The only question that is questionable is the assessment of the facts and the associated amount of the tax claim. As a result, no provisional tax assessment can be carried out here.

Examples of factual cases for provisional purposes are:

  • Profit making ( hobby )
  • Procurement-related effort
  • Usual useful life of an asset
  • Value of a property

Cases of a legal nature are for example:

The provisional nature means that the material validity does not arise when the tax assessment has been declared provisional in accordance with Section 165 AO, as it can be revoked or changed at any time in accordance with Section 165 Paragraph 2 AO. However, a provisional tax assessment becomes formally final, with the result that an objection to a provisional tax assessment would have to be rejected as inadmissible after the objection period has expired ( § 358 sentence 2 AO).

Requirement of provisionality

A preliminary tax assessment may be required in the following cases:

  • Uncertainty about the (life) circumstances (basic case of Section 165 (1) sentence 1 AO)
  • Uncertainty regarding contracts with other countries (so-called double taxation agreements )
  • to the extent that a tax law is incompatible with the Basic Law
  • insofar as the legislature was obliged by the Federal Constitutional Court to revise a tax law
  • due to possible incompatibility with higher-ranking law (e.g. violation of EU law)
  • as far as the Federal Fiscal Court has the interpretation of a tax law as the subject of proceedings


The scope of § 165 AO is to tax assessments and administrative measures on which the rules on taxing application (so-called equivalent notices -.. For example, notice of assessment ) is limited.

A provisional tax assessment is ordered by the tax authority as an ancillary provision within the meaning of § 120 AO in the tax assessment . It is also a discretionary decision within the meaning of § 5 AO, i. H. it is initially at the dutiful discretion of the tax authorities to mark a tax assessment as provisional. For reasons of equal treatment, however, there may be a reduction in discretion to zero , as the principle of uniformity of taxation laid down in Article 3 of the Basic Law and in Article 85 of the AO can justify the taxpayer's right to a provisional tax assessment.

The tax assessment issued as a provisional tax assessment must contain an express reference to the provisional nature and its scope, otherwise the tax assessment will be final. If the scope of provisionality is missing, the ancillary provision is void due to the lack of sufficient specificity in terms of content within the meaning of Section 119 (1) AO according to prevailing opinion, with the result that the tax assessment notice becomes final. However, if only the reason for provisionality is missing and the scope is stated, an unlawful tax assessment will be issued, which is however provisional. The lack of justification within the meaning of § 121 AO can be made up for in accordance with § 126 Paragraph 1 No. 2 AO at the latest by the financial court proceedings, which would result in the healing of the illegal administrative act.

A provisional tax assessment is subject to the suspension of expiry in accordance with Section 171 (8) AO , i.e. H. the statute of limitations does not apply to the provisional part of the tax assessment, with the result that this acc. Section 165 AO can still be changed or repealed. Only one year after the tax authority has positive knowledge of the elimination of the uncertainty, the provisional part of the tax assessment also becomes statute-barred, so that from this point in time this part can no longer be changed and becomes final (expiry of the statute of limitations). For the beginning of the one-year period up to the statute of limitations, however, it is not the end of the uncertainty that is decisive, but rather the point in time when the tax authorities became aware of it (so-called positive knowledge). Within this one-year period, the tax authority has the option (or obligation) to change the tax assessment as necessary or to revoke the provisional nature.

According to the wording of the law, Section 165 AO assumes that it will be dealt with ex officio . Nevertheless, the taxpayer is free to submit an application for a change, as long as the tax authority does not act on its own. A tacit handling of the provisionality is only possible in the cases of § 165 Abs. 1 S. 2 AO. It follows from this that in the basic case of provisionality (Section 165 (1) sentence 1 AO - uncertainty about a life situation) the tax authority should also lift the provisionality at the latest when the uncertainty ends. However, Section 165 (2) sentence 3 AO contains a simplification rule for all other cases . In this case, the provisional nature can only be lifted upon application by the taxpayer and the decision declared as final. Again, according to § 171 para. 8 AO at the latest at the end of the one-year period for the taxpayer with regard to the provisional limitation. A special repeal is not necessary in this respect.

The provisional measure covers cases in which there is a subjective uncertainty for the tax authority . It should also be noted that the uncertainty must be of a temporary nature; H. if it can be foreseen that this will exist in the long term, the tax authority has to make use of the possibility of the estimate according to § 162 AO. Furthermore, a provisional tax assessment does not release the tax authorities from their investigation and clarification obligations ( § 85 , § 86 , § 88 AO). In addition, the Federal Fiscal Court has made it clear that the provisionality must not serve administrative convenience.

If the tax authority provisionally carries out a tax assessment, although the prerequisites for this were not met, the tax assessment can no longer be changed even if the change works in favor of the taxpayer and the taxpayer requests the change by means of an application.

Difference to the reservation of the review

The tax assessment subject to the review keeps the entire tax case open and differs from the provisional tax assessment in that it only keeps individual controversial points open in the assessment procedure. By virtue of the express legal authorization in Section 165 (3) AO, a tax assessment can be made both provisionally and subject to review, as both have different legal requirements and pursue different goals. Both regulations are independent of the other. However, while the reservation of the review is statute-barred in accordance with Section 164 (4) AO and the notification can no longer be changed in accordance with Section 164 AO, a provisional tax assessment is subject to the suspension of the process.

It should also be noted that a reservation of the review is not legally permissible if the tax authority has already finally examined the tax case. However, it may be necessary for factual reasons to keep the decision open insofar as the origin of the tax claim is disputed. This possibility is only opened up via § 165 AO.

Individual evidence

  1. BFH of April 25, 1985, Federal Tax Gazette. II 1985, p. 648.
  2. BMF letter of January 10, 2019 on the provisional determination from 2005. (pdf) Retrieved on December 5, 2019 .
  3. , accessed on July 31, 2010 (pdf)
  4. Ax, Große, Melchior - AO and FGO, Item 1513, p. 362.
  5. BFH of September 26, 1990, Federal Tax Gazette. II 1990, p. 1043
  6. BFH of July 8, 1998, Federal Tax Gazette. II 1998, p. 702