Last Updated on May 31, 2021 by LawEuro
The Fiscal Code of Germany
II. Period of limitation for the assessment
Section 169
Period for assessment
(1) A tax assessment and its cancellation or amendment shall no longer be permissible once the period for assessment has expired. This shall also apply to corrections of obvious errors under section 129. The time limit for assessing a tax shall be deemed complied with if, before the period for assessment has expired,
1. the tax assessment notice or, in cases where section 122a applies, the electronic notification has left the domain of the revenue authority responsible for assessing the tax or
2. the assessment has been disclosed or published in cases of public notification pursuant to section 10 of the Administrative Service of Documents Act.
(2) The period for assessment shall be:
1. one year for excise duties and excise duty rebates,
2. four years for taxes and tax rebates that are not the taxes referred to under number 1 above or are not tax rebates under Article 5 numbers 20 and 21 of the Union Customs Code.
The period for assessment shall be ten years where taxes have been evaded and five years where they have been recklessly understated. This shall also apply where the tax evasion or reckless understatement of tax has not been committed by the tax debtor or a person of whose services he avails himself to meet his tax obligations, unless the tax debtor shows that his wealth has not increased as a result of the act and that this act was not brought about by his omission to take the due precautions necessary to prevent an understatement of tax.
Section 170
Beginning of the period for assessment
(1) The period for assessment shall begin at the end of the calendar year in which the tax has arisen or a conditional tax has become unconditional.
(2) Notwithstanding the provisions of subsection (1) above, the period for assessment shall begin
1. where a tax return or a self-assessed tax return is to be submitted or a notice posted, at the end of the calendar year in which the tax return, the self-assessed tax return or the notice is submitted, at the latest however at the end of the third calendar year following the calendar year in which the tax has arisen, unless subsection (1) above prescribes that the period for assessment shall begin later,
2. where a tax that is to be paid by way of tax marks or tax stamps, at the end of the calendar year in which tax marks or tax stamps have been used for the tax case, at the latest however at the end of the third calendar year following the calendar year in which the tax marks or tax stamps should have been used.
This shall not apply to excise duties, excluding energy tax on natural gas and electricity duty.
(3) Where a tax or tax rebate is assessed upon application only, the period for the cancellation or amendment of this assessment or its correction pursuant to section 129 shall not begin before the end of the calendar year in which the application is made.
(4) Where by application to capital tax or real property tax of subsection (2) number 1 above the date of commencement of the period for assessment is postponed, the date of commencement of the period for assessment for the subsequent calendar years of the main assessment period shall be postponed by the same amount of time.
(5) The period for assessment pursuant to subsection (1) or (2) above with respect to inheritance tax (gift tax) shall not begin
1. for acquisition by reason of death, before the end of the calendar year in which the transferee has become aware of the transfer,
2. for endowment, before the end of the calendar year in which the endower has died or the revenue authority has become aware of the endowment executed,
3. for transfer of property for particular purpose between living persons, before the end of the calendar year in which the obligation has been met.
(6) The period for assessing tax on income from capital that
1. is derived from states or territories that are not members of the European Union or the European Free Trade Association, and
2. is not automatically reported in accordance with agreements within the meaning of section 2(1) or arrangements based on such agreements,
shall begin no earlier than the end of the calendar year in which such income from capital was disclosed to the revenue authorities through a declaration by the taxpayer or by other means, but no later than ten years after the end of the calendar year in which the tax was incurred.
(7) For taxes on income or gains stemming from relationships with third-country companies as defined in section 138(3) over which a taxpayer can directly or indirectly exercise controlling or decisive influence, alone or jointly with related parties as defined in section 1(2) of the External Tax Relations Act, the period for assessment shall begin no earlier than the end of the calendar year in which these relationships were disclosed through a notification by the taxpayer or through other means, but no later than ten years after the end of the calendar year in which the tax was incurred.
Section 171
Suspension of expiration
(1) The period for assessment shall not expire for as long as the tax assessment cannot be undertaken within the last six months of the period as a result of force majeure.
(2) If an obvious error has occurred in the issuance of a tax assessment notice, the period for assessment shall not end before the expiration of one year following the disclosure of such tax assessment notice. The same shall apply in the cases referred to in section 173a.
(3) Where an application for tax assessment, or cancellation of or amendment to a tax assessment, or its correction pursuant to section 129, is made outside of objection proceedings or legal proceedings, the period for assessment shall not expire before an incontestable decision has been reached on the application.
(3a) Where a tax assessment notice is contested by way of objection proceedings or legal proceedings, the period for assessment shall not expire before an incontestable decision has been reached on the legal remedy; this shall also apply where the action is first brought when the period for assessment has expired. The expiration of the period for assessment shall be suspended with regard to the entire tax claim; this shall not apply where the legal remedy is impermissible. In the cases of sections 100(1), first sentence, 100(2), second sentence, 100(3), first sentence, and 101 of the Code of Procedure for Fiscal Courts, a decision on the legal remedy shall become incontestable only once a tax assessment notice issued on the basis of the aforementioned provisions has become incontestable.
(4) Where an external audit is commenced before the period for assessment has expired or where its commencement is postponed upon application by the taxpayer, the period for assessment of the taxes in relation to which the external audit has been initiated or, in the case of a postponed audit, is to be initiated, shall not expire before the tax assessment notices to be issued on the basis of the external audit have become incontestable or before three months have expired following disclosure of the notification pursuant to section 202(1), third sentence. This shall not apply where an external audit is interrupted immediately after its commencement for a period of more than six months for reasons for which the revenue authority bears responsibility. The period for assessment shall end at the latest when the periods named in section 169(2) have ended since expiration of the calendar year in which the final meeting has taken place or, in the absence of such, since expiration of the calendar year in which the last investigations as part of the external audit have taken place; a suspension of expiration pursuant to other provisions shall remain unaffected.
(5) Where the customs investigation offices or the offices of the revenue authorities of a Land charged with tax investigations begin the process of calculating tax bases for the taxpayer before expiration of the period for assessment, the period for assessment shall not expire before the tax assessment notices to be issued on the basis of the calculations have become incontestable; subsection (4), second sentence, above shall apply mutatis mutandis. The same shall apply where the taxpayer has been informed before expiration of the period for assessment of the initiation of criminal tax proceedings or administrative fine proceedings as a result of a tax-related administrative offence; section 169(1), third sentence, shall apply mutatis mutandis.
(6) Where an external audit of the taxpayer cannot be carried out in the territory of application of this Code, the expiration of the period for assessment shall also be suspended by other investigative actions within the meaning of section 92 until the tax assessment notices issued on the basis of these investigations have become incontestable. The suspension of expiration shall only then become effective, however, where the taxpayer has been informed of the commencement of investigations under the first sentence above before the period for assessment has expired; section 169(1), third sentence, shall apply mutatis mutandis.
(7) In the cases mentioned in section 169(2), second sentence, the period for assessment shall not end before the period of limitation for prosecution of the tax crime or tax-related administrative offence has become time-barred.
(8) Where pursuant to section 165 the assessment of a tax has been suspended or the tax has been provisionally assessed, the period for assessment shall not end before expiration of one year after the uncertainty has been removed and the revenue authority has been informed of such. In the cases referred to in section 165(1), second sentence, the period for assessment shall not end before expiration of two years after the uncertainty has been removed and the revenue authority has been informed of such.
(9) Where the taxpayer posts notification pursuant to sections 153, 371 and 378(3) before the period for assessment has expired, the period for assessment shall not end before expiration of one year following receipt of the notification.
(10) To the extent that a notice of determination, a base tax amount notice or another administrative measure is binding (basic assessment notice) for the assessment of a tax, the period for assessment shall not end before the expiration of two years following the disclosure of such a basic assessment notice. If the authority responsible for issuing such a basic assessment notice is not a revenue authority as defined in section 6(2), the period for assessment shall not end before the expiration of two years following the date when the revenue authority responsible for issuing the follow-up notice obtained knowledge of the issuance of the basic assessment notice. For basic assessment notices to which section 181 does not apply, the first and second sentences above shall apply only if an application for such a basic assessment notice was submitted to the competent authority prior to the expiration of the assessment period for the follow-up notice. If the expiration of the assessment period is suspended pursuant to subsection (4) above for that part of the tax that is not bound by the basic assessment notice, the assessment period for that part of the tax that is bound by the basic assessment notice shall not end before the expiration of the period suspended pursuant to subsection (4) above.
(10a) If, as described in section 93c, taxpayer data are received by the revenue authorities within seven calendar years following the tax period or tax date, the period for assessment shall not end before the expiration of two years following receipt of such data.
(11) Where a person incapable of contracting or with limited ability to contract has no legal representative, the period for assessment shall not end before expiration of six months after the date on which the person acquires unlimited ability to contract or the lack of representation is remedied. The shall also apply to the extent that a custodian has been appointed for a person and reservation of consent pursuant to section 1903 of the Civil Code has been ordered, but the custodian has died or in some other manner is no longer available or is prevented from representing the person on legal grounds.
(12) Where a tax is imposed on an inheritance, the period for assessment shall not end before expiration of six months after the date on which the inheritance is assumed by the heir or insolvency proceedings have been initiated with respect to the inheritance, or from which the tax can be assessed against a representative.
(13) Where, before expiration of the period for assessment, a tax which has not yet been assessed is registered in insolvency proceedings, the period for assessment shall not end before expiration of three months after the insolvency proceedings have been concluded.
(14) The period for assessment for a tax claim shall not end for as long as the period of limitations for an associated refund claim pursuant to section 37(2) has not become time-barred (section 228).
(15) In the event that a third party must withhold and remit taxes on behalf of a tax debtor or must pay taxes on behalf of a tax debtor, the assessment period that applies to the tax debtor shall not end prior to the expiration of the assessment period that applies to the party obliged to pay the tax.
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