Last Updated on May 31, 2021 by LawEuro
The Fiscal Code of Germany
2nd Subchapter
Separate determination of tax bases, assessment of base amounts of non-personal taxes
I. Separate determination
Section 179
Determination of tax bases
(1) Notwithstanding the provisions of section 157(2), tax bases shall be determined separately by way of notice of determination where this is stipulated in this Code or in other tax laws.
(2) A notice of determination shall be issued against the taxpayer to whom the object of the determination is attributable for taxation. Separate determination shall be undertaken uniformly against several participants where this is required by statute or where the object of the determination is attributable to several persons. Where one of these persons participates in the object of the determination solely via another person, a special separate determination may be undertaken.
(3) Where a determination which should have been made does not appear in a notice of determination, it shall be included in an additional notice.
Section 180
Separate determination of tax bases
(1) The following, in particular, shall be determined separately:
1. the assessed values in accordance with the Valuation Act,
2.
a) income which is subject to income tax and corporation tax, and other related tax bases where several persons have a share in the income and the income is attributable for tax purposes to these persons,
b) in cases other than those mentioned in a) above, income from agriculture and forestry, business or self-employment where, given the situation at the end of the period for determining profit, the tax office responsible for separate determination is not also responsible for taxes on income,
3. the value of assets subject to capital tax (sections 114 to 117a of the Valuation Act) and the value of debts and other deductions (section 118 of the Valuation Act), where the assets , debts and other deductions are attributable to several persons and such determination is relevant for taxation.
If, in cases where number 2(b) of the first sentence above applies, the circumstances establishing local jurisdiction have changed following expiration of the period for calculating profits, local jurisdiction shall be based on the provisions of section 18(1) numbers 1 to 3 in conjunction with section 26 also for determination periods that precede the change in such circumstances.
(2) In order to ensure that the law is applied uniformly to similar situations, and in order to simplify the taxation procedure, the Federal Ministry of Finance may stipulate, by way of ordinances issued with the consent of the Bundesrat, that tax bases are to be determined separately and, for several persons, jointly in cases other than those mentioned in subsection (1) above. In particular, such ordinances may specify the following:
1. the object and scope of the separate determination,
2. the conditions necessary for the determination procedure,
3. the local jurisdiction of the revenue authorities,
4. the participants in the determination procedure (procedure participants) and the scope of their obligations and rights for taxation purposes, including the representation of participants by other participants,
5. the disclosure of administrative acts to procedure participants and persons authorised to take receipt of such,
6. the permissibility, scope and implementation of external audits to calculate tax bases.
The Federal Ministry of Finance may stipulate, by way of ordinances issued with the consent of the Bundesrat, that tax bases which do not have effect until a later point in time are to be determined separately and, for several persons, jointly in order to ensure correct taxation at a later date; the second sentence above shall apply accordingly. Such ordinances shall not require the consent of the Bundesrat where they concern import/export duties and excise duties, with the exception of beer duty.
(3) Subsection (1), first sentence, number 2a above shall not apply if
1. only one of the persons with a share of the income is subject to income tax or corporation tax in this Code’s territory of application, or
2. the case is one of negligible importance, in particular because the amount and its allocation have been specified; this shall apply mutatis mutandis to the cases described in subsection (1), first sentence, numbers 2a and 3 above.
The tax office with local jurisdiction under section 18(1) number 4 may issue a notice stating that a separate determination is not to be carried out. This notice shall count as a tax assessment notice.
(4) Furthermore, subsection (1), first sentence, number 2a above shall not apply to consortia whose sole purpose is to fulfil a single contract for work and services or contract for work and materials.
(5) Subsection (1), first sentence, number 2, subsection (2) and subsection (3) above shall apply accordingly insofar as
1. the income excluded from the tax base pursuant to an agreement for the avoidance of double taxation is relevant in assessing the tax of the participants, or
2. withheld taxes and corporation tax are to be credited against the assessed tax.
Section 181
Procedural rules for separate determination, determination period, obligation to file returns
(1) The provisions on executing the taxation procedure shall apply mutatis mutandis to separate determination. A return for the separate determination of tax bases shall be a tax return as described in section 170(2), first sentence, number 1. If a return for separate determination under section 180(2) is filed without a corresponding request by the revenue authority to do so, section 170(3) shall apply mutatis mutandis.
(2) Those persons to whom the object of the determination is wholly or partially attributable shall file a return for separate determination. The following persons in particular shall be required to file a return:
1. in cases referred to in section 180(1), first sentence, number 2a, every participant in the determination who has earned a share of the income subject to income tax or corporation tax,
2. in the cases referred to in section 180(1), first sentence, number 2b, the trader,
3. in the cases referred to in section 180(1), first sentence, number 3, every participant in the determination to whom a share of the assets, debts or other deductions is attributable,
4. in the cases referred to in section 180(1), first sentence, numbers 2a and 3, the persons specified in section 34.
If a person who is required to file a return for separate determination has already done so, other participants shall be exempt from the requirement to file a return.
(2a) The return for separate determination under section 180(1), first sentence, number 2 shall be transmitted using an officially prescribed data set via remote data transmission. To avoid undue hardship, the revenue authority may waive electronic transmission upon request; in such cases, the return for separate determination shall be filed using an officially prescribed form and personally signed by the person required to file a declaration.
(3) The period within which the separate determination of assessed values is to be undertaken (determination period) shall begin upon expiration of the calendar year at whose beginning the main determination, the updating, the subsequent determination or the cancellation of an assessed value is to be carried out. Where a return for the separate determination of the assessed value is to be filed, the determination period shall begin upon expiration of the calendar year in which the return is filed, but no later than upon expiration of the third calendar year following the calendar year at the beginning of which the determination of the assessed value is to be carried out or cancelled. Where the beginning of the determination period pursuant to the second sentence above is postponed, the beginning of the determination period shall be postponed by the same amount of time for the other determination dates of the main determination period.
(4) In the cases mentioned in subsection (3) above, the determination period shall not begin before expiration of the calendar year at the beginning of which the assessed value applies for tax purposes for the first time.
(5) Separate determination may also be undertaken following the expiration of the determination period to which it applies in as much as the separate determination is of relevance for a tax assessment for which the period of assessment has not yet expired at the time the separate determination is made; section 171(10) shall not be taken into account. Reference shall be made to such in the notice of determination. Section 169(1), third sentence, shall apply mutatis mutandis.
Section 182
Effects of separate determination
(1) Notices of determination, even when they are not yet incontestable, shall be binding for other notices of determination, for base tax amount notices, for tax assessment notices and for self-assessed tax returns (follow-up notices) to the extent that the determinations made in the notices of determination are relevant for these follow-up notices. In the case of determinations pursuant to section 180(5) number 2, this shall apply accordingly to administrative acts affecting the realisation of claims from the tax debtor-creditor relationship. If a notice of determination pursuant to section 180(5) number 2 is issued, cancelled or amended, any administrative act for which such notice of determination has a binding effect shall be corrected, applying section 175(1), first sentence, number 1 accordingly.
(2) A notice of determination for an assessed value pursuant to section 180(1), first sentence, number 1 shall also have effect for legal successors to whom, after the determination has been carried out, the object of the determination is transferred with corresponding tax implications. However, if legal succession takes place before the notice of determination has been issued, the notice shall have effect for the legal successor only if it is disclosed to him. The first and second sentences above shall apply accordingly to (a) separate and (b) separate and joint tax base determinations that do not have effect until a later point in time, in accordance with the “Ordinance on the separate determination of tax bases” adopted in accordance with section 180(2).
(3) If a separate determination is carried out jointly for multiple participants in accordance with the second sentence of section 179(2), and if the notice of determination incorrectly identifies a participant because a legal successor has taken that participant’s place, this may be rectified by issuing a special notice to the legal successor.
Section 183
Authorised recipients in the case of joint determination
(1) Where a notice of determination is directed against several persons who are involved in the object of the determination as partners or co-owners (participant in the determination), these should appoint a common recipient authorised to take receipt of all administrative acts and notifications connected with the determination procedure and any subsequent objection proceedings. In the absence of a common authorised recipient, a person entitled to represent the partnership or participants in the determination or to manage the object of the determination shall be the authorised recipient. Where this is not the case, the revenue authority may demand that participants appoint an authorised recipient within a certain reasonable period. To this end, a participant shall be proposed and reference shall be made to the fact that he will be notified of the administrative acts and notifications named in the first sentence above with effect for and against all participants, to the extent that no other authorised recipient is appointed. In notifying the authorised recipient, reference shall be made to the fact that notification is done with effect for and against all participants in the determination.
(2) Subsection (1) above shall not apply where the revenue authority is aware that the partnership or association no longer exists, that a participant is no longer part of the partnership or association, or that serious differences of opinion exist between the participants. Where pursuant to the first sentence above individual notification is necessary, the participant shall be informed of the object of the determination, the tax bases concerning all participants, his share, the number of participants and the tax bases concerning him personally. Where he has a legitimate interest, the participant shall be informed of the entire contents of the notice of determination.
(3) Where an authorised recipient pursuant to subsection (1), first sentence, above exists, notices of determination may be made known to him even with effect for a participant named in subsection (2), first sentence, above to the extent that and provided that this participant or the authorised recipient has not objected. Any revocation of the authorisation shall take effect in relation to the revenue authority only once the revenue authority has received it.
(4) Where an economic entity is attributed to
1. spouses or civil partners or
2. spouses and their children, civil partners and their children, or single parents and their children,
and where the participants have not appointed a common authorised recipient, the provisions of section 122(7) on consolidated notices shall apply accordingly with regard to the disclosure of notices of determination on the assessed value.
II. Assessment of base amounts of non-personal taxes
Section 184
Assessment of base amounts of non-personal taxes
(1) Base amounts of non-personal taxes which are to be calculated pursuant to the tax laws shall be assessed by way of base tax amount notice. The assessment of base amounts of non-personal taxes shall also constitute a decision on the personal and material tax liability. The provisions on executing the taxation procedure shall apply mutatis mutandis. In addition, section 182(1) and, for notices assessing the base amount of real property tax, section 182(2) and section 183 shall apply mutatis mutandis.
(2) The power to assess base amounts of non-personal taxes shall also include the power to take measures pursuant to section 163(1), first sentence, insofar as guidelines for such measures have been set out in a general administrative provision adopted by the Federal Government, the highest federal revenue authority or the highest revenue authority of a Land. To the extent that a measure taken pursuant to the second sentence of section 163(1) influences commercial revenue as a basis for assessing income tax, such measure shall also have effect for trade income as a basis for assessing the base amount of trade tax.
(3) The revenue authorities shall report the content of the base tax amount notice and the measures taken pursuant to subsection (2) above to the municipalities charged with assessing the tax (issuing the base tax amount notice).
3rd Subchapter
Apportionment and allocation
Section 185
Validity of the general provisions
The provisions which apply to the base amounts of non-personal taxes shall apply accordingly to the apportionment of such base amounts as provided for in the tax laws unless otherwise stipulated in the following.
Section 186
Participants
The following shall participate in the apportionment procedure:
1. the taxpayer,
2. the taxing entities to which a share of a base amount of non-personal tax has been allocated or which claim a share. Where the taxing entity is not obliged to assess the tax, the authority responsible for assessing the tax shall take its place.
Section 187
Inspection of files
The participating taxing entities may demand from the competent revenue authority information regarding the basis of apportionment and may have its public officials inspect the records relating to the apportionment.
Section 188
Notice of apportionment
(1) A notice on the apportionment (apportionment notice) shall be issued in writing and made known to the participants where it affects them.
(2) The apportionment notice shall specify the volume of the base amount of non-personal tax to be apportioned and shall determine the shares to be allocated to the participating taxing entities. Furthermore, it shall provide details of the basis of apportionment.
Section 189
Amendment to the apportionment
Where a taxing entity’s claim to a share of a base amount of non-personal tax has not been taken into account and has not been rejected, the apportionment shall be amended or subsequently undertaken ex officio or upon application. Where the existing apportionment notice relating to taxing entities that have already participated in the apportionment procedure has become incontestable, only those amendments which result from the subsequent inclusion of the taxing entities that have hitherto been overlooked may be undertaken when amending the apportionment. The apportionment shall not be amended or subsequently undertaken where one year has passed since the base tax amount notice became incontestable unless the taxing entity overlooked had applied before the year has expired for the amendment to be subsequently undertaken or amended.
Section 190
Allocation procedure
Where the full volume of a base amount of non-personal tax is to be allocated to one taxing entity but there is disagreement as to which taxing entity is entitled to such base amount, the revenue authority shall reach a decision by way of allocation notice upon application by a participant. The provisions which apply to the apportionment procedure shall apply accordingly.
4th Subchapter
Liability
Section 191
Notices of liability, notices of compulsory tolerance
(1) A claim may be made by way of notice of liability against anyone who is legally liable for a tax (liable person) or by way of notice of compulsory tolerance against anyone who is legally obliged to tolerate enforcement. Contestations relating to claims from the tax debtor-creditor relationship which are not part of insolvency proceedings shall be made by way of notice of compulsory tolerance provided that they are not to be made by way of plea as provided for in section 9 of the Act on Contesting Transactions of a Debtor Not Included in Insolvency Proceedings; in calculating deadlines pursuant to sections 3 and 4 of said Act, the issue of a notice of compulsory tolerance shall be deemed equal to a judicial act allowing contestability pursuant to section 7(1) of the Act. The notices shall be issued in writing.
(2) Before a notice of liability is issued against a lawyer, a patent agent, a notary, a tax consultant, a tax representative, an auditor or a certified accountant on account of an action within the meaning of section 69 carried out in the exercise of his profession, the revenue authority shall allow the responsible professional organisation the opportunity to present aspects which from its perspective are of relevance to the decision.
(3) The provisions on the period for assessment shall apply accordingly to the issue of notices of liability. The period for assessment shall be four years in the cases referred to in section 70, ten years in the case of tax evasion, five years in the case of reckless tax understatement, and ten years in the cases referred to in section 71. The period for assessment shall begin upon expiration of the calendar year in which the matter to which the law attaches the consequence of liability arose. Where the tax for which liability is borne has not yet been assessed, the period for assessment for the notice of liability shall not end before expiration of the period for assessment which applies to the assessment of taxes; where this is not the case, section 171(10) shall apply mutatis mutandis. In the cases referred to in sections 73 and 74, the period for assessment shall not end before the period of limitations for tax assessed against the tax debtor has become time-barred (section 228).
(4) Where the tax laws do not provide for the liability, a notice of liability may be issued as long as the liability claims are not yet time-barred pursuant to the laws relevant to them.
(5) A notice of liability may no longer be issued
1. insofar as the tax has not been assessed against the tax debtor and, because the period for assessment has expired, can no longer be assessed,
2. insofar as the tax assessed against the tax debtor is time-barred or the tax debt has been remitted.
This shall not apply where the liability is based on the fact that the person owing the liability has committed tax evasion or has received, held or sold property obtained by tax evasion.
Section 192
Contractual liability
Whoever promises on the basis of a contract to assume responsibility for the tax of another may be required to do so only in accordance with the provisions of civil law.
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