Joint Audits in Germany Competent Tax Court has again ruled in favor of instigating a Joint Audit against taxpayer’s will

Joint Audits have been enjoying increasing popularity for some time now in Europe. German tax authorities promote them as an effective means of clarifying the facts of cross-border cases and avoiding double taxation. Evidence of the fact that taxpayers do not always approve of coordi-nated tax audits may be taken from the procedures before the competent tax court Cologne in recent years (decisions dated 23 May 2017 – 2 V 2498/16 and dated 20 October 2017 – 2 V 1055/17).

With the competent authority (i.e., German Federal Tax Office) in its district the tax court Cologne has exclusive jurisdiction over any claim against a coordinated tax audit, joint audit or any other means of cross-border mutual assistance between the German and foreign tax authorities. The court’s recent decisions on claims against simultaneous tax audits and against joint audits show a clear tendency towards allowing coordinated tax audits per se. This impression was confirmed by the court’s recent decision as of 12 September 2018 (2 K 814/18).