© Institute for Digitalization in Tax Law
Chaired by Dr. Heino Weller, Expert Committee IV of the IDSt presents its comprehensive White Paper, which outlines and explains the substantive focal points of the committee’s future work.
The objective of the work will be to digitize necessary tax evidence and documents and make them digitally available in seamless end-to-end processes. The scope of the work will be shaped on one hand by technological advancements and on the other hand by tax laws, particularly the compliance requirements that need to be considered in this context. In this process, the Expert Committee also examines adjacent legal areas, such as social security and customs law.
The White Paper highlights three fundamental focal points:
Due to the hindrance caused by unstructured documents to digital solutions and the complexities they pose in process automation and data analysis, the main focus of the committee’s work will be to develop proposals for replacing unstructured documents. This will pave the way towards a fully digital document management system. A successful example of this development is the adoption of structured data formats for bank statements, which has been recognized by the authorities since 2019. Consequently, there has been a shift away from paper-based or PDF-based record-keeping.
Furthermore, the committee will investigate how documents and records, which serve as evidence or proof, can be created in hybrid data formats. The approach taken will be comprehensive, addressing not only the existing types of documents but also the processing of non-financial information while considering sustainability-related, integrated, and forward-looking corporate reporting.
The main focus of the work on the topic ‘Digital Process Chains’ (1) will be to develop process chains that provide necessary tax evidence and documents exclusively in digital format, from their creation through their use (e.g., during external audits) to their archiving, while aiming to minimize media disruptions. As examples, expense reports for business travel and non-monetary benefits are mentioned, as they can have numerous tax implications and, consequently, social security consequences. The manual processing of these documents often hinders the establishment of a digital process chain.
At this juncture, Expert Committee IV will advocate for a reconsideration of the substantive legal regulations and undertake reforms with a focus on enhancing digitalizability.
The White Paper provides an example of digital availability of documents at the time of need, describing the transfer of auditor’s balances at the conclusion of a tax audit and referring to the project “Referenzierung auf Belege” (RABE). The RABE project aims to establish a seamless process in tax assessment and auditing procedures, eliminating media disruptions. The Expert Committee suggests that similar solutions should be implemented in comparable processes, such as the audit process according to § 28p SGB IV.
Furthermore, according to the Expert Committee, the entire area of issuing tax assessments presents an opportunity for comprehensive digitization. The ongoing project “Digitaler Gewerbesteuerbescheid” (Digital Trade Tax Assessment) can serve as a reference in this regard.
To realize digital process chains, another essential prerequisite is the “standardization” (2) of the data required in these processes, ensuring their semantic clarity. The Expert Committee proposes standardization as a means to replace unstructured documents and initiates or accompanies relevant pilot projects. The primary focus is always on achieving a common standard agreed upon by regulatory bodies and industry practice. The Expert Committee also keeps abreast of current developments in the regulatory and technical standardization landscape, particularly in areas where new questions related to documents or proofs may arise.
In the third focus area of the White Paper, “Compliance” (3), the Expert Committee sees its role as providing expert coordination. The committee aims to explore and describe the possibilities of digital solutions for documents and proofs within the context of compliance, while ensuring a secure foundation. This exploration will be done in close cooperation with the administration and other institutions supported by the business community. The ultimate goal is to develop digital solutions that adhere to compliance principles, taking into account the interconnections between tax law and social security law. One potential approach could involve aligning with the principles of the GoBD (Principles for the Proper Management and Storage of Books, Records, and Documents). By doing so, not only can the desired legal certainty be achieved, but also potential synergies and streamlining opportunities for bureaucracy.
The explanations in Expert Committee IV’s White Paper clearly demonstrate that the topics addressed are not free from overlap, neither concerning the stated three focal points nor regarding the work of the other committees within the Institute for Digitalization in Tax Law. Consequently, Committee IV aims for close networking with the other committees.
