Last Updated on May 31, 2021 by LawEuro
The Fiscal Code of Germany
III. Finality
Section 172
Cancelling and amending tax assessment notices
(1) A tax assessment notice, to the extent that it has not been issued provisionally or subject to review, may be cancelled or amended only
1. where it concerns excise duties,
2. where it concerns taxes other than import and export duties pursuant to Article 5 numbers 20 and 21 of the Union Customs Code or excise duties,
a) provided that the taxpayer agrees or the essence of his application is met; however, this shall apply to the benefit of the taxpayer only to the extent that he has agreed or submitted the application before the period for objection has expired or to the extent that the revenue authority remedies objection proceedings or legal proceedings,
b) to the extent that it has been issued by an authority which is not responsible,
c) to the extent that it has been effected by dishonest means such as fraudulent misrepresentation, threat or bribery,
d) to the extent that this is otherwise permitted by law; sections 130 and 131 shall not apply.
This shall also apply where the tax assessment notice has been confirmed or amended by a ruling on an objection. The first sentence of number 2(a) above shall likewise apply in the cases mentioned in the second sentence above where the taxpayer has agreed or submitted the application before the period for legal proceedings has expired; declarations and evidence which pursuant to section 364b(2) were not admitted in the objection ruling shall not be taken into account thereby.
(2) Subsection (1) above shall also apply to an administrative act with which an application for a tax assessment notice to be issued, cancelled or amended has been rejected in full or in part.
(3) Pending applications for the cancellation or amendment of a tax assessment that are made outside of objection proceedings or legal proceedings which concern a legal issue ruled on by the Court of Justice of the European Union, the Federal Constitutional Court or the Federal Fiscal Court and which cannot be granted following the conclusion of the proceedings before these courts may be rejected by way of a general order. Section 367(2b), second to sixth sentences, shall apply accordingly.
Section 173
Cancelling or amending tax assessment notices as a result of new facts or evidence
(1) Tax assessment notices shall be cancelled or amended
1. where facts or evidence which lead to a higher tax are subsequently ascertained,
2. where facts or evidence which lead to a lower tax are subsequently ascertained and the fact that these facts or evidence are only ascertained subsequently is not due to grave negligence on the part of the taxpayer. Negligence shall be inconsequential where the facts or evidence have a direct or indirect connection to the facts or evidence within the meaning of number 1 above.
(2) Notwithstanding the provisions of subsection (1) above, tax assessment notices, to the extent that they have been issued on the basis of an external audit, may be cancelled or amended only where taxes have been evaded or recklessly understated. This shall also apply where notification pursuant to section 202(1), third sentence, has been issued.
Section 174
Conflicting tax assessments
(1) Where a particular circumstance has been taken into account to the detriment of one or more taxpayers in more than one tax assessment notice despite the fact that such circumstance should have been taken into account only once, the incorrect tax assessment notice shall be cancelled or amended upon application. Where the deadline for this tax assessment has already passed, an application may still be submitted for up to one year after the last of the tax assessments in question has become incontestable. Where the application is made on time, there shall be no deadline imposed for the cancellation or amendment of the tax assessment notice.
(2) Subsection (1) above shall apply mutatis mutandis where a particular circumstance has been taken into account more than once to the benefit of one or more taxpayers in an incompatible manner; an application shall not be required. However, it shall be possible to correct the incorrect tax assessment notice only where the circumstance was taken into account on the basis of an application or declaration by the taxpayer.
(3) Where it is obvious that a particular circumstance has not been taken into account in a tax assessment notice because it was assumed that it is to be taken into account in another tax assessment notice and where this assumption transpires to be incorrect, the tax assessment which did not take the circumstance into account may be subsequently carried out, cancelled or amended. The subsequent carrying out, cancellation or amendment shall be permissible only until the period for assessment which applies to the other tax assessment expires.
(4) Where as a result of incorrect appraisal of a particular circumstance a tax assessment notice has been issued which, as the result of an appeal or otherwise upon application by the taxpayer, is cancelled or amended by the revenue authority to his benefit, the proper taxation implications of the circumstance may subsequently be effected by issuing or amending a tax assessment notice. This shall also apply where the tax assessment notice is cancelled or amended by the court. The expiration of the period for assessment shall be inconsequential where the taxation implications are effected within one year following cancellation or amendment of the incorrect tax assessment notice. This shall apply solely under the conditions outlined in subsection (3), first sentence, above where the period for assessment had already expired when the tax assessment notice which has been subsequently cancelled or amended was issued.
(5) Subsection (4) above shall apply with respect to third parties where they were involved in the proceedings which led to the incorrect tax assessment notice being cancelled or amended. Their enlistment in or summons to these proceedings shall be permissible.
Section 175
Amending tax assessment notices based on basic assessment notices and events with retroactive effect
(1) A tax assessment notice shall be issued, cancelled or amended
1. to the extent that a basic assessment notice (section 171(10)) which has a binding effect on this tax assessment notice is issued, cancelled or amended,
2. to the extent that an event which entails tax implications on periods already elapsed occurs (event with retroactive effect).
In the cases mentioned in the first sentence, number 2, above the period for assessment shall begin upon expiration of the calendar year in which the event occurs.
(2) The cessation of a precondition bestowing a tax privilege shall also be deemed to be an event with retroactive effect where it is legally determined that this precondition must be met for a certain amount of time or where an administrative act has determined that it forms the basis for granting the tax privilege. The subsequent issue or submission of a certification or confirmation shall not be deemed to be an event with retroactive effect.
Section 175a
The implementation of mutual agreement understandings
A tax assessment notice shall be issued, cancelled or amended where this is required in order to implement a mutual agreement understanding or an arbitral award pursuant to an agreement within the meaning of section 2. The period for assessment shall not end before expiration of one year after the mutual agreement understanding or arbitral award has come into effect.
Section 175b
Amending tax assessment notices based on transmissions of data from third parties
(1) A tax assessment notice shall be cancelled or amended if data transmitted to revenue authorities by notifying entities in accordance with section 93c were not accounted for or were accounted for incorrectly.
(2) If data transmitted to revenue authorities by notifying entities in accordance with section 93c are deemed to have been provided by the taxpayer as per the second sentence of section 150(7), tax assessment notices shall be cancelled or amended to the extent that such data are incorrect to the taxpayer’s detriment.
(3) If data transmitted to revenue authorities in accordance with section 93c can be considered for tax purposes only if the taxpayer consents to the transmission of such data, then tax assessment notices shall be cancelled or amended to the extent that such consent has not been granted.
(4) Subsections (1) and (2) above shall not apply if subsequently transmitted data as described in section 93c subsections (1) and (3) have no legal relevance.
Section 176
Protection of confidence in cancelling and amending tax notices of assessment
(1) Where a tax assessment notice is cancelled or amended, the following may not be taken into account if it is to the taxpayer’s disadvantage:
1. the Federal Constitutional Court determines the invalidity of a law upon which the tax assessment was based,
2. a highest federal court does not apply a provision, upon which the tax assessment was based, because it holds it to be unconstitutional,
3. a ruling of a highest federal court, which was applied by the revenue authority in the tax assessment, has changed.
Where the court rulings up to that point had already been taken into account in a tax return or self-assessed tax return without this having been recognisable by the revenue authority, number 3 above shall apply only where it can be assumed that the revenue authority would have applied the standing case law had they been aware of the circumstances.
(2) Where a tax assessment notice is cancelled or amended, it may not be taken into account if it is to the taxpayer’s disadvantage that a general administrative provision of the Federal Government, a highest federal authority or a highest authority of a Land has been classified by a highest federal court as being incompatible with current law.
Section 177
Correction of material errors
(1) Where the conditions for cancelling or amending a tax assessment notice to the taxpayer’s disadvantage exist, those material errors which are not the cause of the cancellation or amendment shall be corrected to the taxpayer’s advantage or disadvantage insofar as the amendment is sufficient.
(2) Where the conditions for cancelling or amending a tax assessment notice to the taxpayer’s advantage exist, those material errors which are not the cause of the cancellation or amendment shall be corrected to taxpayer’s advantage or disadvantage insofar as the amendment is sufficient.
(3) Material errors within the meaning of subsections (1) and (2) above shall be all errors, including obvious errors within the meaning of section 129, which lead to the assessment of a tax which deviates from the tax which arose by application of law.
(4) Section 164(2), section 165(2) and section 176 shall remain unaffected.
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