Last Updated on May 31, 2021 by LawEuro
The Fiscal Code of Germany
Out-of-court proceedings for legal remedy
Permissibility of objections
(1) Objection to administrative acts
1. in fiscal matters to which this Code applies,
2. in procedures to enforce administrative acts in matters other than those described under number 1 above, insofar as the administrative acts are to be enforced by revenue authorities of the Federation or Land revenue authorities pursuant to the provisions of this Code,
3. in public law and occupational law matters to which this Code applies pursuant to section 164a of the Tax Consultancy Act,
4. in other matters administered by the revenue authorities, insofar as the provisions on out-of-court legal remedies have been or are declared applicable by law,
shall be permissible as a means of legal remedy. In addition, an objection shall be permissible where it is asserted that in the matters described in the first sentence above no ruling has been made on an application by the appellant for the issue of an administrative act without notification of a sufficient reason within an appropriate time limit.
(2) “Fiscal matters” shall mean all matters connected to the administration of taxes including tax refunds or matters otherwise connected with the application of tax and excise provisions by the revenue authorities, including measures of the revenue authorities of the Federation to ensure adherence to prohibitions and restrictions in respect of the cross-border flow of goods; matters concerning the administration of fiscal monopolies shall be deemed equal to fiscal matters.
(3) The regulations of the Seventh Part shall not apply to criminal and administrative fine proceedings.
Impermissibility of objections
It shall not be permissible to object
1. to objection rulings (section 367),
2. to failure to rule on the objection,
3. to administrative acts of the highest revenue authorities of the Federation and the Länder, except for acts that provide for objection proceedings,
4. to rulings in matters contained in the second and sixth chapter of the second part of the Tax Consulting Act,
6. in the cases described in section 172(3).
Only the party asserting to have been aggrieved by an administrative act or the omission thereof shall be authorised to lodge an objection.
Binding effect of other administrative acts
(1) Unless the provisions on the cancellation or amendment of administrative acts provide otherwise, administrative acts amending incontestable administrative acts may be challenged only to the extent that the amendment suffices.
(2) Rulings on a basic assessment notice (section 171(10)) may be challenged only by contesting this notice and not by contesting the follow-up notice.
Authority to object in the case of joint determination
(1) The following may lodge an objection against notices on the joint and separate determination of tax bases:
1. managing directors appointed as representatives or, where such are not available, the agent authorised to object within the meaning of subsection (2) below,
2. where persons in number 1 above are not available, every partner, co-owners or persons jointly entitled against whom a notice of determination has been issued or would have to be issued,
3. even where persons in number 1 above are available, former partners, co-owners or persons jointly entitled against whom a notice of determination has been issued or would have to be issued,
4. insofar as it involves the question of who has a holding in the amount determined and how this amount is divided between the individual participants involved, everyone who is affected by the corresponding findings,
5. insofar as it involves a matter of personal concern to a participant, everyone who is affected by the corresponding findings.
(2) The person authorised to object within the meaning of subsection (1) number 1 above shall be the common authorised recipient within the meaning of section 183(1), first sentence, or section 6(1), first sentence, of the Ordinance of 19 December 1986 on the separate determination of tax bases pursuant to section 180(2) of the Fiscal Code (Federal Law Gazette I, p. 2663). Where the persons involved in the determination have not appointed a common authorised recipient, the person authorised to object within the meaning of subsection (1) number 1 above shall be the nominal authorised recipient pursuant to section 183(1), second sentence, or the authorised recipient appointed by the revenue authority pursuant to section 183(1), third to fifth sentences, or pursuant to section 6(1), third to fifth sentences, of the Ordinance on the separate determination of tax bases pursuant to section 180(2) of the Fiscal Code; this shall not apply to persons involved in the determination who raise an objection with the revenue authority against the authorised recipient’s authority to object. The first and second sentences above shall only apply where the participants in the determination declaration or in the call for the appointment of an authorised recipient have been instructed of the authorised recipient’s authority to object.
Legal successor’s authority to object
Where a notice of determination, a notice assessing the base amount of real property tax or an apportionment and allocation notice with respect to a base amount of real property tax has an impact on the legal successor without his having been informed of this (section 182(2), section 184(1), fourth sentence, sections 185 and 190), the legal successor may lodge an objection only within the relevant period for objection applicable to the legal predecessor.
Waiver of objection
(1) The submission of an objection may be waived following issue of the administrative act. The waiver may also be made when submitting a self-assessed tax return in the event that the tax assessed does not deviate from that in the self-assessed tax return. The waiver shall render objection impermissible.
(1a) Insofar as bases for taxation may be of significance for a mutual agreement procedure or arbitration pursuant to an agreement within the meaning of section 2, entitlement to lodge an objection may be waived. The tax base to which the waiver applies shall be described precisely.
(2) The waiver shall be made to the revenue authority responsible in writing or declared for record; it may not contain any further declarations. Where the invalidity of the waiver is subsequently asserted, section 110(3) shall apply mutatis mutandis.
Period for objection
(1) Objection pursuant to section 347(1), first sentence, shall be lodged within one month of notice of the administrative act. An objection against a self-assessed tax return shall be lodged within one month of the revenue authority receiving the self-assessed tax return, in the cases of section 168, second sentence, within one month of disclosure of the agreement.
(2) No time period shall apply to the objection pursuant to section 347(1), second sentence.
Instructions on applicable legal remedies
(1) Where an administrative act is issued in writing or in electronic form, the time period for lodging an objection shall begin only if the participant has been instructed, in line with the manner used for that act, about the possibility to object, the revenue authority where such an objection must be lodged, the location of the revenue authority, and the deadline for lodging an objection.
(2) Where such instructions have not been given or have been given incorrectly, the lodging of an objection shall be permissible only within one year following disclosure of the administrative act, unless lodging an objection before such one-year period expires is not possible due to force majeure or unless instructions are provided in writing or electronically that it is not possible to lodge an objection. Section 110(2) shall apply mutatis mutandis for the instance of force majeure.
Submission of the objection
(1) The objection shall be submitted in written or electronic form or lodged orally. For the purpose of identifying the appellant, it shall suffice for the appellant to be indicated in the objection. The objection shall not be adversely affected if it is designated incorrectly.
(2) The objection shall be lodged with the authority whose administrative act is being disputed or to which an application for an administrative act was submitted. An objection against the determination of tax bases or against the assessment of a base amount of non-personal tax may also be entered with the authority responsible for issuing the tax assessment notice. An objection directed against an administrative act that an authority issued for the responsible revenue authority on the basis of a legal provision may also be lodged with the responsible revenue authority. Lodging a written or electronic objection with another authority shall have no adverse effects if the objection is transmitted, prior to the deadline for objection, to one of the authorities where an objection may be lodged in accordance with the first to third sentences above.
(3) The administrative act against which the objection is directed should be stated when submitting the objection. The extent to which an administrative act is being challenged and its cancellation applied for should be indicated. Furthermore, both the facts justifying the objection and the evidence should be cited.
Verification of the requirements for permissibility
The revenue authority appointed to rule on the objection shall verify whether the objection is permissible and, in particular, has been submitted in the prescribed form and within the prescribed deadline. Where any one of these requirements is not meet, the objection shall be rejected as impermissible.
The participants in the proceedings shall be:
1. whoever has submitted the objection (appellant),
2. whoever has been enlisted in the proceedings.
Enlistment of others in the proceedings
(1) The revenue authority appointed to rule on the objection may enlist other persons, ex officio or upon application, whose legal interests, pursuant to the tax laws, will be affected by the ruling, including, in particular, those who, pursuant to the tax laws, are also liable in addition to the taxpayer. Prior to the enlistment of others, the person who submitted the objection shall be consulted.
(2) Where a fiscal charge is administered for another entity entitled to the fiscal charge, this entity may not be enlisted merely because its interests, as the entity entitled to the fiscal charge, will be affected by the ruling.
(3) Where third parties are involved in the contentious legal relationship in such a way that a ruling can only be taken in a uniform manner in relation to them as well, they shall be enlisted in the proceedings. This shall not apply for persons jointly entitled who, pursuant to section 352, are not authorised to submit an objection.
(4) Whoever is enlisted in the proceedings may assert the same rights as the person who has submitted the objection.
(5) Where pursuant to subsection (3) above more than 50 persons are candidates for enlistment, the revenue authority may decree that only those persons who apply for enlistment within a particular period shall be enlisted. Individual notification of the decree may be waived where the decree is published in the Federal Gazette and is furthermore published in the daily newspapers which are disseminated in the area in which the ruling is likely to have an effect. The deadline shall be at least three months from the date of publication in the Federal Gazette. The publication in the daily newspapers shall state the date upon which the deadline expires. Section 110 shall apply accordingly with respect to restitutio in integrum where a time limit has not been complied with. The revenue authority should enlist persons who will be evidently affected to a particular degree by the ruling including, even without an application being made for such.
Suspension of implementation
(1) Subject to the provisions of subsection (4) below, the submission of an objection shall not have the effect of blocking implementation of the disputed administrative act, especially where the levy of a fiscal charge is concerned. The same shall apply when contesting basic assessment notices for the follow-up notices based thereon.
(2) The revenue authority which issued the disputed administrative act may suspend implementation in whole or in part; section 367(1), second sentence, shall apply mutatis mutandis. Upon application, suspension should be granted where serious doubts exist as to the legality of the administrative act being disputed or where implementation would result for the person affected in unreasonable hardship not required by overriding public interests. Where the administrative act has already been implemented, the suspension of implementation shall be replaced by the cancellation of the implementation. In the case of tax assessment notices, the suspension and the cancellation of implementation shall be limited to the assessed tax minus the withheld taxes to be credited, the corporation tax to be credited and the assessed prepayments; this shall not apply where the suspension or the cancellation of implementation appears to be necessary in order to prevent substantial disadvantages. Suspension may be made dependent upon provision of collateral.
(3) Insofar as the implementation of a basic assessment notice is suspended, the implementation of a follow-up notice shall also be suspended. The issue of a follow-up notice shall remain permissible. In the case of the suspension of a follow-up notice, a ruling shall be made on the provision of collateral, unless the provision of collateral was specifically excluded when suspending the implementation of the basic assessment notice.
(4) The submission of an objection against the prohibition of the operation of a trade or business or the exercise of an occupation or profession shall have the effect of blocking implementation of the disputed administrative act. The revenue authority which issued the administrative act may eliminate the blocking effect in whole or in part by specific order where the revenue authority deems this necessary in the public interest; the revenue authority shall substantiate the argument for the public interest in writing. Section 367(1), second sentence, shall apply mutatis mutandis.
(5) Rejection of the suspension of the implementation may only be referred to the court pursuant to section 69(3) and (5), third sentence, of Code of Procedure for Fiscal Courts.
Withdrawal of the objection
(1) An objection may be withdrawn up until the point at which notification is given of the ruling. Section 357(1) and (2) shall apply mutatis mutandis.
(1a) Insofar as tax bases may be of significance for a mutual agreement procedure or arbitration pursuant to an agreement within the meaning of section 2, the objection against this may be withdrawn subject to limitations. Section 354(1a), second sentence, shall apply accordingly.
(2) The withdrawal shall result in the forfeiture of the objection submitted. Where the invalidity of the withdrawal is subsequently asserted, section 110(3) shall apply mutatis mutandis.
Suspending and adjourning the proceedings
(1) Where the ruling depends in whole or in part on the existence or non-existence of a legal relationship which is the object of a pending legal dispute or which must be determined by a court or an administrative authority, the revenue authority may suspend the ruling until the other legal dispute is resolved or until the court or administrative authority has ruled.
(2) The revenue authority may, with the consent of the appellant, adjourn the proceedings where this appears appropriate on important grounds. Where proceedings are pending at the Court of Justice of the European Union, the Federal Constitutional Court or a highest federal court with respect to the constitutionality of a legal norm or to a legal question, and where the objection is based upon this, the objection proceedings shall be adjourned to this extent; this shall not apply if tax has been provisionally assessed pursuant to section 165(1), second sentence, number 3 or 4. With the consent of the highest revenue authority, it may be decreed, through a general order to be publicly disclosed, for groups of similar cases that objection proceedings are also adjourned to this extent in cases other than those contained in the first and second sentences above. The objection proceedings shall be resumed upon application by the appellant or where the revenue authority informs the appellant accordingly.
(3) Where an application for the suspension or adjournment of proceedings is rejected or the suspension or adjournment of proceedings revoked, the unlawfulness of the rejection or revocation may only be asserted by court action against the objection ruling.
Disclosure of the taxation documents
The participants shall, insofar as this has not yet occurred, be informed of the taxation documents upon application or, where the grounds of the objection give cause for such, ex officio.
Discussion of the current and legal status
(1) Upon application by the appellant, the revenue authority should discuss the current and legal status before issuing an objection ruling. Further participants may be invited where the revenue authority believes this to be expedient. The revenue authority may invite the appellant and other participants to a discussion even in the absence of an application by the appellant.
(2) The revenue authority may elect not to hold a discussion with more than ten participants. Where the participants appoint a common representative within an appropriate deadline set by the revenue authority, the current and legal status should be discussed with him.
(3) The participants may elect to be represented by an authorised representative. They may also be invited to the discussion in person where the revenue authority believes this to be expedient.
(4) Attendance may not be forced pursuant to section 328.
Determination of deadlines
(1) The revenue authority may set deadlines for the appellant
1. to state the facts through the consideration or non-consideration of which he feels aggrieved,
2. to clarify specific matters requiring clarification,
3. to specify evidence or to present documents insofar he is obliged to do this.
(2) Declarations and evidence provided only after the deadline set pursuant to subsection (1) above has expired shall not be taken into consideration. Section 367(2), second sentence, shall remain unaffected. Section 110 shall apply accordingly where the deadline is exceeded.
(3) Upon setting the deadline, the appellant shall be instructed of the legal consequences pursuant to subsection (2) above.
Application of procedural rules
(1) The provisions applying to the issue of the disputed or desired administrative act shall furthermore apply mutatis mutandis to the proceedings regarding the objection.
(2) In the cases described in section 93(5), 96(7), second sentence, and sections 98 to 100, the participants and their authorised representatives and advisors (section 80) shall be given the opportunity to participate in the taking of evidence.
(3) Where the contested administrative act is amended or replaced, the new administrative act shall become the subject matter of the objection proceedings. The first sentence above shall apply accordingly where
1. an administrative act is corrected pursuant to section 129, or
2. an administrative act replaces a disputed, invalid administrative act.
Form, content and issuance of the objection ruling
Objection rulings shall be substantiated, shall contain instructions on applicable legal remedies and shall be issued to the participants in written or electronic form.
(1) The revenue authority which has issued the administrative act shall take a decision on the objection by means of an objection ruling. Where another revenue authority has subsequently become responsible for a tax case, this revenue authority shall make the ruling; section 26, second sentence, shall remain unaffected.
(2) The revenue authority ruling on the objection shall re-examine the matter in its entirety. The administrative act may also be amended to the detriment of the appellant where he has been instructed of the possibility of a detrimental ruling stating the reasons and he has been given the opportunity to comment on this. An objection ruling shall only be required to the extent that the revenue authority does not remedy the objection.
(2a) The revenue authority may rule on parts of the objection in advance where this is expedient. In this ruling, the revenue authority shall determine which parts are not to become final and binding.
(2b) Pending objections 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 remedied before these courts following the outcome of the proceedings may be rejected by way of a general order. The highest revenue authority shall have subject-matter jurisdiction over the issue of the general order. The general order shall be published in the Federal Tax Gazette and on the website of the Federal Ministry of Finance. The general order shall be deemed disclosed on the date following the issuance of the Federal Tax Gazette in which such order is published. Notwithstanding section 47(1) of the Code of Procedure for Fiscal Courts, the deadline for court action shall end after the expiry of one year following the date of disclosure. Section 63(1) number 1 of the Code of Procedure for Fiscal Courts shall also apply insofar as an objection is rejected by a general order pursuant to the first sentence above.
(3) Where the objection is directed against an administrative act which an authority issued for the revenue authority responsible on the basis of a legal provision, the revenue authority responsible shall rule on the objection. The authority acting for the revenue authority responsible shall also be authorised to remedy the objection.
Section 368 (rescinded)