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In the last days of 1999, the government managed to reach agreement with the opposition parties, which control the Federal Council (Bundesrat), and enact a bevy of fiscal and social insurance measures. It also announced details of a major new bill planned for the year 2000 (Tax Reform 2000). Below we list the most important measures and indicate the articles dealing with them:
1. Law for the Adjustment of Tax Provisions (1999 Tax Adjustment Act – Steuerbereinigungsgesetz) – summarised by this article.
2. Repeal of foreign contractor withholding
This measure is part of the 1999 Tax Adjustment Act. It is summarised below (sec. 3.4) and covered in more detail in article no. 185.
3. Tax Reform 2000
This is not new legislation, but rather an announcement made on 21 December 1999 of the government's plans for a new tax bill in the year 2000. See article no. 184.
4. Revision of standard useful lives of depreciable assets
This is likewise not new legislation, but rather the announced intention of the tax authorities to re-assess the useful lives of various assets. See sec. 3.6 of this article and article no. 187.
5. Law for the Promotion of Self-Employment (affects "sham" and "quasi-employee" freelancers) – summarised in article no. 186.
6. Law for the Continuation of Ecological Tax Reform – summarised in article no. 188.
7. Reduction of Income Limits for Home Ownership Subsidies (part of the Law Amending the Rent Subsidy Act and Other Laws) – summarised in sec. 7.2 of this article.
8. Family Assistance Act – see sec. 7.4 of this article and article no. 189.
Given the volume of new legislation, the following summary is necessarily selective. Unless otherwise noted, the amendments discussed below apply beginning with the 2000 assessment year and are contained in the 1999 Tax Adjustment Act, which was promulgated on 22 December 1999 (BStBl I 1999, 2601). The new measures are grouped in sec. 3 ff. below according to their areas of primary impact. Some measures could have been placed in more than one category.
As always, but especially when dealing with new legislation, professional advice should be sought before any action or inaction in reliance on information contained in this article.
Up-to-date figures from the Federal Ministry of Finance on the fiscal impact of the 1999 Tax Adjustment Act were not available when this article was finalised. However, the partial figures released in November 1999 are sufficient to understand the dimensions of this legislation.
Overall, the law reduces tax revenue by some DM 2 billion annually. This figure refers to the impact of the various measures on tax owing in the first assessment period in which they take effect.
By far the most important single measure in the bill is the reduction of flat rate taxation under § 8b (7) KStG from 15 % to 5 % (minus DM 1.5 billion – sec. 3.1 below). The most important revenue-raising measure appears to be the changes in interest payable on back taxes (plus DM 45 million – sec. 9.1 below).
3. Changes affecting commercial businesses
Partial denial of business expense deduction on receipt of tax free dividends
(§ 8b (7) KStG)
Changes are made in the flat rate taxation introduced by the Tax Relief Act for the Years 1999/2000/2002 for dividends received free of tax under a tax treaty (participation exemption dividends). Because of doubts as to conformity with EU law, the denial of the business expense deduction under § 8b (7) KStG has been reduced from 15 % to 5 % of the amount of participation exemption dividends. The official statement of reasons for the bill states that § 3c EStG may not be applied in addition to § 8b (7) KStG. This is to say that, with regard to participation exemption dividends, the flat rate taxation replaces the standard rules regarding the non-deductibility of expenses related to tax free income. The amendments apply beginning with the 1999 assessment year (§ 54 (6d) KStG).
A final assessment from the point of view of EU law has yet to come.
With regard to tax consolidated groups (Organschaft), clarification is provided to the effect that, in determining the income of member companies in the tax consolidated group, the tax exemption for dividends received from foreign corporations (participation exemption dividends) still applies even if the lead company in the tax consolidated group (Organträger) is the domestic permanent establishment of a foreign corporation within the meaning of § 8b (4) KStG. The preference of § 8b (2) KStG (tax free gain on sale of shares in foreign corporations) also applies in such situations. The amendments are for purposes of clarification only and hence apply to all cases which are still open.
Corporation tax rate (§ 23 (2) sent. 5 KStG)
The Tax Relief Act for the Years 1999/2000/2002 reduced the corporation tax rate from 45 % to 40 % for retained earnings. To prevent corporations from obtaining this reduction on pre-1999 retained earnings by paying dividends to group parents, the tax rate for such retained earnings (EK 45) remains 45 %. A provision is now added extending this treatment to situations in which a corporation with EK 45 is reorganised as a partnership with corporate partners. The change applies to the assessment years 1999 ff.
3.2 Recapture of foreign branch losses (§§ 2a (3) (4), 53 (3) EStG)
The Tax Relief Act for the Years 1999/2000/2002 repealed the tax preference for foreign branch losses under former § 2a (3) and (4) EStG. However, subsequent foreign branch profits of taxpayers who availed themselves of this tax preference in the past are still taxable through the assessment year 2008 under the recapture provisions. Recapture also occurs when profits arise on the sale of foreign branches (permanent establishments) and in certain reorganisation situations. The Tax Adjustment Act expands the recapture provisions under the Tax Relief Act. Moreover, the more stringent provisions apply starting with the 1999 assessment year and are hence retroactive (whereas they would have applied starting in the year 2000 under the August 1999 draft of the Tax Adjustment Act).
Under the Tax Adjustment Act, recapture is triggered by any of the following events, whether or not gain is realised:
• reorganisation of the permanent establishment as a corporation,
• transfer of a permanent establishment for consideration or gratuitously, or
• liquidation of the permanent establishment if the former business of the permanent establishment is continued in whole or in part either by a company in which the domestic taxpayer who previously owned the permanent establishment holds a direct or indirect stake of 10 % or more or by a party related to this taxpayer within the meaning of § 1 (2) AStG.
The provisions of § 4 (2) UmwStG regarding the receiving partnership's assumption of the tax attributes of the transferring corporation are revised to provide, among other things, that the receiving partnership steps into the shoes of the transferring corporation with respect to valuation of the assets received. It will be recalled that the Tax Relief Act for the Years 1999/2000/2002 made changes in this area (in particular mandatory reversal of writedowns to going concern value for assets which later recover in value – § 6 (1) no. 1 sent 2 - 4 and no. 2 sent. 2 and 3 EStG). The changes made in § 6 EStG necessitated changes in § 4 (2) UmwStG which were, however, overlooked at the time of the Tax Relief Act. This oversight has now been corrected. The amendment apparently applies from 1 January 2000.
Cash buyout of a minority shareholder (§ 17 UmwStG)
§ 17 UmwStG presently permits gain realised in order to buy out withdrawing shareholders to escape recognition under the rollover provisions of § 6b EStG. § 17 UmwStG has been eliminated since the underlying rollover provisions of § 6b EStG were repealed by the Tax Relief Act for the Years 1999/2000/2002.
The transition provision states that § 17 UmwStG in only applicable to legal acts for which the effective date of the reorganisation for tax purposes is prior to 1 January 1999 (new § 27 (4) UmwStG.
Deferral of taxation under § 21 (2) UmwStG
The unrealised appreciation (hidden reserves) in new shares taken in a receiving corporation pursuant to a tax-free reorganisation may become taxable without sale of the shares in certain cases. It is then sometimes possible to pay the resulting tax owing over a period of 5 years without paying interest on the deferred tax amount. This deferral terminates if certain additional events occur during the deferral period (for instance, if the shares are sold during this period). The list of events causing the deferral to terminate has been expanded to include reorganisation of the corporation in question as a partnership. The new provision applies to "transactions taking place after 31 December 1999".
3.4 Withholding tax for foreign contractors (§ 50a (7) EStG)
In article no. 178, we reported on the government's announced intention to repeal retroactively the foreign contractor withholding provision (§ 50a (7) EStG) added to the income tax code with effect from 1 April 1999 by the Tax Relief Act for the Years 1999/2000/2002. Our article also discussed the withholding provision itself at length.
The 1999 Tax Adjustment Act repeals § 50 (7) EStG retroactive to the date on which it first took effect.
Changes in tax balance sheet after submission (§ 4 (2) EStG)
Changes in the tax balance sheet after its submission to the tax authorities are currently permitted only to the extent the balance sheet as originally submitted was not in accordance with German GAAP as modified by the tax laws. Sentence 2 of this provision has been revised to permit amendments to aspects of the balance sheet which, while not incorrect in themselves, are closely related in time and subject matter to a correction. Apparently, the impact of such amendments on profits cannot exceed that of the correction to which they are related. The new sentence 2 apparently applies to all assessment years (new § 52 (9) EStG).
Liabilities contingent on future earnings (§ 5 (2a) EStG)
This provision states that obligations which are contingent on future revenue or profits shall not give rise to a liability or an accrual until the revenue or profit in question has actually been earned. The new rule might, for instance, apply to an obligation to repay sums received as subsidies. The new rule applies to fiscal years beginning after 31 December 1998. Liabilities or accruals for fiscal years beginning prior to 1 January 1999 must be reversed (retransferred to profits) in the first fiscal year beginning after 31 December 1998 (§ 52 (12a) EStG).
Revisions to tax depreciation tables
In a directive dated 15 June 1999 (DStR 1999, 1112), the tax authorities announced their intention to overhaul the tables defining the standard useful lives of depreciable assets in light of the Federal Tax Court decision of 19 November 1997 (BStBl II 1998, 59; DStR 1998, 198). In connection with Tax Reform 2000 (see article no. 184), the tax authorities estimated additional tax revenue of DM 3.5 billion from this measure, which is still pending.
Anticipated special depreciation for small and medium sized businesses
(§ 7g (8) EStG)
Founders of new businesses are denied the possibility of setting up tax free reserves under § 7g (7) EStG to the extent subsidies are prohibited under EU law for so-called "sensitive sectors" such as the iron and steel industry, shipbuilding, car manufacturing, the artificial fibre industry, agriculture, fishing and aquaculture, transportation, and hard coal mining. The limitation applies to fiscal years beginning after 31 December 1996 (§ 52 (23) last sent. EStG). See also sec. 3.8 below.
Depreciation of buildings (§§ 11c (2), 84 EStDV)
The Tax Relief Act for the Years 1999/2000/2002 provided for a mandatory reversal of writedowns taken on assets including buildings when the reason for a writedown to going concern value or for unscheduled depreciation by reason of exceptional technical or economic wear has ceased to apply in whole or in part. The basis on which the depreciation of buildings is calculated in these cases is increased by the amount of the writeup taken on the asset beginning with the following calendar year. This rule applies to fiscal years ending after 31 December 1998.
All value added tax amendments take effect on 1 January 2000.
The retention period for invoices under § 14a UStG (intra-community deliveries) has been extended to ten years.
Taxation of supplies involving gold deposits (§ 25c UStG)
New § 25c UStG regulates the VAT treatment of gold deposits to bring German law into line with the Sixth EC Directive, which must be transformed into domestic law by 1 January 2000.
Place of supply for telecommunications services (§ 1 UStDV)
In the situations covered by § 1 (1) no. 2 UStDV (VAT implementing regulations), the place of supply of telecommunications services is where the service is exploited or used. The rule is intended to prevent distortion of competition and was made possible by an amendment to the Sixth EC Directive.
Plans to refine this rule and relocate it in § 1 (2) UStDV were abandoned in the course of the legislative process.
Correction of input tax credit (§ 44 UStDV)
For reasons of administrative simplicity, correction of the input tax credit under § 15a UStG will no longer be part of the monthly or quarterly VAT return. Instead, the correction will take place on the annual return if the annual adjustment amount for a single asset does not exceed DM 12,000. The new procedure does not apply to the deemed supply situations dealt with in § 3 (1) (b) UStG.
The following changes have been made in the 1999 Investment Subsidies Act to comply with EU law:
• The subsidy for replacement investments has been reduced. The investment subsidy for replacement investments in buildings is eliminated entirely. Subsidies are scheduled to end on 31 December 2002.
• The subsidy rates for initial investments have been increased from the year 2000 on.
• To comply with EU "sensitive sector" regulations, subsidies to these sectors are eliminated from 1999 onwards. See also sec. 3.6 above.
• The periods during which movable fixed assets must belong to, be used in, and remain part of the business has been extended from 3 years to 5 years.
• Subsidies for Berlin are contingent from the year 2000 onwards.
• The previous exclusionary period for filing applications (September 30th) will not apply.
Under German domestic tax law (§ 34c EStG), taxpayers subject to German tax on their worldwide income may in some cases deduct foreign taxes from taxable income.
Beginning with the assessment period 2000, such deduction under § 34c (3) EStG will only be permitted in so-called "tax treaty situations" where the foreign country taxes income not sourced within its borders, provided the structure involved is supported by economic motives or other valid reasons (abuse proviso). Deduction is also impermissible if the foreign country is permitted to tax the income in question under the terms of the tax treaty.
Beginning with the assessment year 2000, § 49 (1) no. 8 EStG makes § 23 (1) sent. 4 EStG applicable to purchases and sales of interests in partnerships (correction of a drafting error).
4.3 Distinguishing personal from business interest expense (§ 4 (4a) EStG)
The Tax Relief Act for the Years 1999/2000/2002 introduced limits on the deductibility of interest as a business expense by owners of personal businesses (partnerships and sole-proprietorships – see article no. 167 sec. I.1, "end of so-called "double account structures"). Prior to the tax relief act, interest was generally recognised as a business deduction as long as the taxpayer segregated his personal from his business finances by using separate bank accounts (so-called "dual account structures"). The Tax Adjustment Act has completely re-written the rules in this area. The new version applies to fiscal years ending after 31 December 1998.
The new law provides that (i) 6 % of total "over-withdrawals" less total "under-withdrawals" or (ii) business interest expense for the year less DM 4,000, whichever is less, will be added back to the profits of each fiscal year. "Over-withdrawals" are defined as the excess of withdrawals over the sum of profits plus contributions for a given year. "Under-withdrawals" are the converse (excess of profits plus contributions over withdrawals for a given year). Total "over-withdrawals" and "total under-withdrawals" include the fiscal year just expired and all preceding fiscal years.
Hence, personal businesses, no matter what their size, whether computing tax on an accrual or cash basis, will have to keep track of all contributions and withdrawals in the future to the extent annual business interest expense exceeds DM 4,000.
The law does, however, create an important exception to this otherwise administratively onerous regime. The new rules will not restrict the deductibility of interest for the purchase or production of fixed assets. This would appear to mean that interest expense will remain fully deductible (no add-back) where the taxpayer can demonstrate a direct connection between the borrowing in question and the purchase or production of a fixed asset.
5. Changes affecting wage withholding
Transfer of direct pension claims etc. upon liquidation of a company
(§ 3 no. 65 sent. 2 EStG)
In the event a company ceases to do business and is liquidated, § 4 (3) of the Law for the Improvement of Company Old-Age Benefits facilitates the transfer of direct pension claims or pension benefits to be provided through so-called "pension support funds" (Unterstützungskassen). Accordingly, tax free transfer of the corresponding obligations to a life insurance company or a pension fund (Pensionskasse) is now possible free of tax. § 3 no. 65 EStG has been amended to provide that the transfer does not result in wage or income tax liability for the employee. The new provision applies to payments made after 31 December 1998 in connection with such transfers.
Certificate of exemption (§ 39a (6) sent. 2 EStG)
Under present law, requests for issuance of certificates of exemption for tax-free wages by reason of low-paying jobs must be filed with the tax office by the end of November in each calendar year. Beginning with the assessment year 2000, such certificates can also be applied for in December of each year and may in proper cases be issued with retroactive effect for past months in the calendar year.
Requests for official advice by companies with several branches (§ 42e EStG)
The employer can request advice from the tax office whether and to what extent wage tax provisions are applicable in a particular case. For employers with several branches, authority to respond to such requests has now been vested in the tax office in whose territory the principal place of management or, alternatively, the branch with the most employees is located. This provision takes effect in the year 2000.
Exemption for "unused" zero bracket amount (§ 39a (1) no. 7 EStG)
If an employee works two jobs and earns less than the zero bracket amount from the first (primary) job, the zero bracket amount or a lesser amount may be treated as an exemption when withholding for the second job (withholding category VI). Whatever exemption is counted when withholding for the second job must be treated as additional income when withholding for the first job. Hence, matching entries are required on the wage withholding documents (Lohnsteuerkarten) for both jobs. The new procedure takes effect in the 2000 assessment year.
Supplemental income from certain activities (§ 3 no. 26 EStG)
Supplemental income from certain activities such as coaching sports teams, teaching, or caring for the sick or infirm has hitherto been tax free up to an annual limit of DM 2,400. This limit has been raised to DM 3,600. If this limit is exceeded, expenses related to the activity are only deductible to the extent they exceed the exemption amount.
Exemption for collective transportation of employees (§ 3 no. 32 EStG)
The in-kind benefit of transportation of employees free of charge or at reduced rates between their home and place of work in employer-provided motor vehicles is tax-exempt if the transportation is necessary to obtain the employee's services. This exemption is being extended to cover employer-provided transportation other than by motor vehicles.
6. Changes affecting private investments
6.1 Deduction of losses from the charter of ships
(§ 2a (1) sent. 1 no. 6 (b) EStG)
The deduction of losses from what is now referred to as "the provision of ships for consideration" (previously, "the lease or rental of ships") is restricted unless the ship is used entirely or almost entirely within Germany's territorial limits. However, an exception is made for commercial shipping which is
• outfitted when chartered out, or
• provided to a domestic outfitter who meets the requirements of § 510 (1) HGB or
• provided on a temporary basis to a foreign outfitter who meets the requirements of § 510 (1) HGB.
Chartering losses subject to the restrictions may be set off against chartering gains of the same type irrespective of the country in which the gains have their source. For other foreign losses covered by § 2a (1) EStG, set-off is restricted to gains of the same type from the same country.
Pursuant to § 52 (3) EStG, the new version of the statute applies to losses under charter contracts entered into after 31 December 1999.
Investors holding shares in a domestic or foreign investment fund which in turn holds shares in a foreign investment fund (indirect share in a foreign investment fund) are treated as equivalent to direct investors (those holding shares directly in a foreign investment fund) effective 1 January 2000. In both cases, capital gains realised after meeting the relevant minimum holding periods ("speculation periods") are free of tax on the investor's level.
"Gains from private sales transactions" received by a real estate mutual fund but not used to cover costs or fund distributions are from 1 January 2000 onwards deemed to be received by the investor upon the expiration of the year of receipt by the fund (deemed receipt rule such as already applied to other retained earnings).
Effective 1 January 2000, gains on the sale of land and equivalent property rights realised inside a foreign investment fund within the ten year holding period which applies for income tax purposes will be taxable to the investor even if retained by the fund.
6.3 Restrictions on tax-free real estate transactions (§ 23 (1) sent. 1 no. 1 EStG)
The Tax Relief Act for the Years 1999/2000/2002 made considerable changes in the area of tax-free sales of assets held as private (as opposed to business) property. In particular, the holding periods were lengthened for land from 2 years to 10 years and for other assets such as securities from 6 months to 1 year. Furthermore, sales of buildings divorced from land were also made subject to the 10 year holding period. Further changes have now been made in this area:
• The 10 year holding period is extended to include sales of exterior building facilities (Außenanlagen), parts of buildings constituting discrete assets, and condominiums. The change applies to contracts of sale which become binding after 31 December 1998.
• The contribution of real property to a business (partnership or sole proprietorship) will be treated as a sale if the property is sold by the business within 10 years following the contribution. The provision applies to contributions after 31 December 1999.
• Constructive contribution to a corporation will also be treated as a sale. The provision applies to constructive contributions after 31 December 1999.
6.4 Taxation of life insurance policies (§§ 10 (1) no. 2(b), 20 (1) no. 6 EStG)
Plans to tax the proceeds of long-term whole life insurance policies were abandoned in the course of the legislative process. Fears that the originally intended measure would be enacted precipitated a wave of last-minute insurance policy buying prior to the contemplated cut-off date. Plans to abolish the deductibility of premiums paid on qualifying whole life insurance policies were likewise dropped.
7. Changes affecting individuals
7.1 Dependent employment income
Age threshold raised for old age exemption (§ 19 (2) sent. 2 no. 2 EStG)
Taxpayers 62 years of age and older have up till now been entitled to an exemption of DM 6,000 for payments received upon reaching a certain age on account of a previous employment relationship (e.g. pension income). The age threshold for the exemption has been increased to 63 years starting on 1 January 2000.
Changes in employee capital investments (§ 19a (3) nos. 4 - 6 EStG)
The list of qualifying capital investments which can be provided to an employee free of tax has been adjusted to accord with the list of capital investments qualifying for bonus savings payments under the Fifth Employee Savings Promotion Law. The new provision applies from the assessment year 2000 onwards.
The Law of 22 December 1999 Amending the Rent Subsidy Act and Other Laws (BStBl I 1999, 2761) contains provisions reducing the two year income limits of § 5 sent. 1 of the Home Ownership Subsidy Act (EigZulG) from DM 240,000 to DM 160,000 and from DM 480,000 to DM 320,000 for single and married persons respectively. The new income limits are increased by DM 60,000 for each child as to whom the requirements for a child subsidy under § 9 (5) sent. 1 and 2 EigZulG are met in the first year. The increase is limited to DM 30,000 in situations governed by § 9 (5) sent. 3 EigZulG.
The new provisions apply to self-constructed homes for which construction begins after 31 December 1999 (§ 19 (3) EigZulG). For purchased homes, they apply if the contract of purchase does not become legally binding until after 31 December 1999 (§ 19 (3) EigZulG).
None of the changes originally planned in this area were enacted.
In article no. 173, we reported on the ruling of the German Federal Constitutional Court of 10 November 1998 declaring German income tax law unconstitutional in certain respects with regard to families with children. The Family Assistance Act of 22 December 1999 (BStBl I 1999, 2552) makes what the government believes are the changes necessary to bring German law into compliance with the high court ruling. For details on this law, please see the separate article no. 189. The essential changes made are as follows:
• Introduction of a new § 53 EStG providing that deductions ranging from DM 3,732 for 1983 to DM 6,168 for 1995 are to be allowed for each dependent child. If the amount previously allowed is less than the amounts fixed in § 53 EStG, the difference is allowed as an additional deduction.
• Government child support payments received for the years in question must be recalculated as deemed deductions for purposes of the above calculation. In other words, the tax-free support payment must be converted into a deduction amount which would have yielded the same net benefit to the taxpayer in question.
8. Valuation law (in particular for purposes of estate tax and real estate transfer tax)
None of the changes originally planned in this area were enacted.
9.1 Expanded interest rules for back taxes and tax refunds (§ 233a AO)
The current four year limit on interest payable is abolished. This amendment applies to interest on taxes accruing after 31 December 1993 (§ 15 (9) on Art. 97 EGAO).
The changes made in this area provide that a setoff cannot have effect retroactive to a time antecedent to the date on which the debt of the person declaring setoff was due. This reverses the result reached by the courts and gives the force of law to the contrary position taken by the tax authorities on this issue in the past. Because of the amendments, the taxpayer cannot receive interest on tax refunds with respect to periods prior to the due date of the tax. Furthermore, late payment penalties which have already accrued can no longer be retroactively eliminated by a setoff.
The maximum amount of the late filing penalty has been increased from DM 10,000 to DM 50,000. According to the official statement of reasons for the Tax Adjustment Act, the tax authorities will only impose higher fines when the interest advantage gained by late filing of a tax return or tax report cannot be fully neutralised by a fine of up to DM 10,000, the previous maximum.
The new provision applies to all cases in which tax returns (ignoring filing extensions) must be filed after 31 December 1999 (§ 8 (2) on Art. 97 EGAO).
The maximum fine to compel a taxpayer to perform, submit to, or refrain from some act has been increased from DM 5,000 to DM 50,000. The change applies to fines threatened after 31 December 1999.
9.5 Expiration of the statute of limitations for assessing tax (§ 171 (3) (3a) AO)
In the future, the statute of limitations for assessing tax cannot expire with respect to the tax claim as a whole until a final decision has been rendered on any administrative appeal or suit pending. This changes the rule created by the courts that, once the statute of limitations has run, an assessment notice may not be revised by the tax authorities to the taxpayer's detriment in the course of an administrative appeal or suit in the tax courts. However, by withdrawing the administrative appeal or suit, the taxpayer can still prevent a change to his detriment.
The new provision applies to all cases in which the statute of limitations for assessing tax has not yet run (§ 10 (9) on Art. 97 EGAO).
9.6 Rescission and modification of tax assessment notices (§ 172 AO)
The new § 172 (1) sent. 1 (a) AO provides statutory authority for the tax authorities to rescind or modify a tax assessment notice in the taxpayer's favour in the course of administrative appeals or court proceedings.
Furthermore, new § 172 (1) sent. 3 1st part AO states that assessment notices which have already been affirmed or modified pursuant to a ruling on an administrative appeal may be modified again in the taxpayer's favour pursuant to his request filed prior to expiration of the deadline for filing a court action against the assessment.
9.7 Simplified procedures for giving notice of administrative actions (§ 122 AO)
The simplified procedures for giving notice of assessment notices presently contained in § 155 (4) and (5) AO have been adopted for purposes of § 122 AO as well (notification with effect for and against other parties and spouses). This makes clear that the simplified procedures apply to administrative acts other than assessment notices.
Planned changes in the area of electronic bookkeeping and access of the tax authorities to such bookkeeping were not enacted. The same is true of changes planned in connection with § 9 of the Money Laundering Act requiring photocopies to be made and retained for all documents necessary to open an account.
9.9 Entry into force of the new provisions (§ 1 EGAO on Art. 97)
Except as otherwise stated above, the amendments to the Tax Procedure Act are generally applicable to all proceedings pending on the day following promulgation of the law (22 December 1999).
For further information, please send a fax or an e-mail stating your inquiry to KPMG Frankfurt, attn. Christian Looks: Fax +49-(0)69-9587-2262, e-mail cLooks@kpmg.com. You may also send an e-mail to KPMG Germany by clicking the Contact Contributor on this screen.
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