Germany Approves New Regulations for External Tax Audits

Germany’s Federal Council approved the new External Audit Regulations, known as the ApO, at its meeting on July 10, 2026.

The regulations had previously been adopted by the Federal Cabinet on May 20, 2026. They replace the former Tax Audit Regulations, known as the BpO 2000.

The new ApO updates Germany’s administrative rules for tax audits and reflects changes introduced by the DAC7 Implementation Act of December 2022. The main objective is to make tax audits faster, more risk-based and more digital, while improving cooperation between taxpayers and tax authorities.

The former BpO contained a separate provision on timely tax audits. This provision has been removed because conducting audits closer to the relevant tax period is now intended to be a general objective for all external audits.

However, taxpayers do not automatically have a legal right to demand an immediate or timely audit.

Taxpayers and tax authorities may conclude a written framework agreement before or during an audit.

Such an agreement can define practical aspects of the audit, including:

• the expected audit schedule,
• deadlines for submitting documents,
• communication and contact arrangements,
• the main areas to be examined, and
• areas that may be excluded from the audit.

The purpose is to make the audit more predictable and improve cooperation. Certain matters cannot be agreed upon, particularly where an agreement would restrict the legal powers or responsibilities of the participating tax authorities.

The ApO also explains when the Tax Authorities may issue a qualified cooperation request under Section 200a of the German Fiscal Code.

This is a formal request requiring the taxpayer to provide specified information or documents within a set deadline. It may generally be issued after the taxpayer has failed to cooperate sufficiently despite previous requests.

Failure to comply can lead to financial penalties and other procedural consequences.

The regulations further clarify the role of the lead group auditor.

This auditor coordinates audits involving several companies within the same corporate group and helps ensure that the participating tax offices apply a consistent approach. This is particularly important in large and complex group structures.

The turnover threshold relevant to mandatory coordinated group audits has also been increased from €25 million to €50 million.

The ApO introduces specific rules for coordinated payroll tax audits.

These audits may cover payroll-tax-relevant establishments belonging to the same corporate group or a single large company. Mandatory coordination generally applies where the group or company reaches the relevant annual turnover threshold of €50 million and employs at least 10,000 people.

The audits are conducted under unified management and according to consistent criteria, even where several tax offices are responsible for different establishments.

The new regulations do not introduce an entirely new tax audit system. Instead, they modernize and clarify how German external tax audits should be organized and conducted.

Businesses should expect:

• greater use of digital communication,
• earlier requests for accounting records,
• stronger focus on risk areas,
• clearer deadlines and cooperation obligations,
• closer coordination between tax authorities, and
• possible penalties where formal cooperation requests are not followed.

The ApO entered into force on the day after it was published in the Federal Tax Gazette. Companies should therefore review their tax-audit procedures, document-management systems and internal responsibilities to ensure they can respond quickly and consistently to future audit requests.