Germany – “Violations against German VAT law are not properly prosecuted” – what does it mean for 2018?

The German Federal Audit Office (“GFAO”) recently published its “Comments 2017” on the German budget of 2016. The GFAO made one really interesting statement in regards to VAT.

Violations against German VAT law are not properly prosecuted:

German VAT law regulates how fines should be assessed in case of violations of the fiscal obligations of entrepreneurs, e.g. if invoices are not issued (in time), retention periods are not met or VAT due is not paid (in full). Legal uncertainties additionally impede the prosecution process. While the German Federal Ministry of Finance warranted in 2008 to sensitize its tax officers to consequently prosecute German VAT law violations, the shortcomings persist until today.

The GFAO postulates that the Federal Ministry of Finance shall work towards a consistent assessment of fines and initiate relevant law changes.

It’s difficult to say what does it mean for 2018 but it could happen that the sanctions might increase. So better to prevent than to try to minimise afterwards.

Read further (comments 24&25):

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