Fully digital tax assessment notices must become the norm, as the legal basis for this was already established in 2017. It is not sufficient to simply make the paper notice available for download in electronic form (e.g., in PDF format). Rather, the notice must also be created in a structured format and thus be machine-readable. The goal must be to provide a legally binding tax assessment notice as a PDF document containing a structured and standardized XML data set. This enables an automatic comparison of the data in the tax assessment notice with the data in the electronic tax return. Media discontinuities and the time-consuming process of entering data from paper notices will thus be a thing of the past.

Flagship Project “Digital Trade Tax Assessment”

The “Digital Trade Tax Assessment” project serves as a model: In the spring of 2023, the digital trade tax assessment was successfully integrated into the tax administration’s digital ELSTER portal. Since then, businesses and tax advisory firms have been able to indicate directly when filing their trade tax returns that they wish to receive the trade tax assessment notice in digital form. The digital trade tax assessment—a legally binding tax assessment in PDF format with a structured and standardized XML data set—is an important step toward the further digitization of the tax process.

The paper-based trade tax assessment notice should be phased out in the near future. It currently exists nationwide in approximately 600 different formats and poses numerous challenges for business operations. In particular, businesses are forced to manually enter the tax assessment notices and digitize them through very time-consuming processes, such as using scanning stations. This is error-prone and expensive. Companies that maintain business premises in multiple municipalities are particularly affected, as they are confronted with trade tax assessment notices structured in different ways.

Digital trade tax assessments also offer significant efficiency gains for municipalities. The digital creation and transmission of these assessments streamline internal administrative processes and, not least, save several million pages of paper per year—an important consideration in terms of resource conservation and sustainability.

In addition, a trade tax clearinghouse should be established to reduce the high administrative burden associated with allocating trade tax. This will significantly ease the burden on companies with business premises in multiple municipalities, as they will have a single, unified point of contact instead of dealing with multiple municipalities.

Avoid Collecting Data Multiple Times from Taxpayers

Data already available to the authorities should not be collected multiple times from taxpayers. A good example is property tax: The announced technical integration of data from the tax administration with data from other authorities (primarily cadastral, surveying, and land registry offices) should be implemented swiftly to reduce the need to request data from taxpayers. Furthermore, the reform of property tax in the states and municipalities must be accompanied by a push toward digitization. Electronic tax returns and notifications submitted by taxpayers must be followed by the digital issuance of structured tax assessments by both the tax administration and local authorities.

Detailed information on the digital trade tax assessment notice