Germany Updates External Tax Audit Rules

Germany’s Federal Cabinet adopted new External Audit Regulations. The new rules will replace the old Tax Audit Ordinance from 2000 and reflect recent changes in German tax procedure law, including the DAC7 Implementation Act.

In practice, the reform aims to make tax audits faster, more coordinated, and more focused on risk. The rules clarify how taxpayers and Tax Authorities can agree on cooperation during audits, including framework agreements and qualified cooperation requests.

The regulation also updates rules for group audits, giving the lead group auditor a clearer coordination role. It also includes explanations on coordinated external payroll tax audits.

One previous rule on “timely audits” will be removed, because timely audits are now treated as a general goal for all audit cases.

The regulation still needs approval from the Bundesrat (upper chamber of Germany's federal legislative system). The Bundestag (Federal Parliament) is not involved. The regulation will take effect the day after its publication