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Tax digitization in the coalition agreement

The coalition agreement was signed on Nov. 24, 2021. It does not contain a “big hit” on tax law reform. For digitization in tax law, on the other hand, and thus for IDSt, it provides extensive starting points. We can build on this in the next four years of this legislative term to advance the issues of our expert committees I to VIII. The following points are relevant to the IDSt:

  • Facilitate the fulfillment of tax obligations through pre-filled tax returns.
  • Advance the digitization of the taxation process.
  • Enabling the digital implementation of tax regulations in principle.
  • Enabling the digitization of the entire interaction between taxpayers and the tax administration.
  • Modernization and acceleration of the audit process through improving interfaces, standardization and sensible use of new technologies.
  • Establishment of a central organizational unit at the federal level to ensure the tax administration’s ability to connect to the digital transformation and for a noticeable reduction in tax bureaucracy.
  • Combating sales tax fraud by introducing a uniform nationwide electronic reporting system for the preparation, verification and forwarding of invoices as quickly as possible. The aim is to reduce the susceptibility of the VAT system to fraud and, at the same time, to modernize and de-bureaucratize the interface between the administration and businesses.
  • Preventing abusive dividend arbitrage through greater use of technical capabilities, e.g. blockchain.

Also of interest is the establishment of the Institute for Empirical Tax Research (IfeS), mentioned in the coalition agreement, to improve the data situation for evidence-based legislation.

Interessant ist auch die im Koalitionsvertrag erwähnte Einrichtung des Instituts für empirische Steuerforschung (IfeS) zur Verbesserung der Datenlage für eine evidenzbasierte Gesetzgebung. This is also an interesting starting point for IDSt, because IfeS will also focus on the importance of data in taxation.

What is the next step? The coalition agreement must now be approved by the respective party committees. To this end, the SPD and FDP party conventions will vote on the agreement on December 4 respectively 5, 2021. The Grünen want to conduct a membership survey by then. Since all three parties can be expected to agree, everything points to an election of the new chancellor and his ministers in the week of Dec. 6, 2021. However, tax laws derived from the coalition agreement are not likely to be introduced in the Bundestag and passed by the Bundestag and Bundesrat until next year. It should be noted that the state governments led by the CDU/CSU have a majority of 48 votes in the Bundesrat. This means that the state level of the CDU/CSU also plays a weighty role in tax policy, as it can jointly block all tax laws of the new traffic light coalition.

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