Legal bases

Within the EU, the so-called Directive on Administrative Cooperation (or ‘DAC’) (Council Directive 2011/16/EU of 15 February 2011) creates a uniform framework for cross-border audit cooperation in the area of ​​direct taxation. Simultaneous controls have been addressed in article 12 of the DAC since 2011. An amending directive of 2021 added article 12a on joint audits. The new Article 12a was to be transposed into national law in such a way that joint audits can be conducted under the new rules since 2024.

In Germany, the requirements of the DAC on simultaneous audits and joint audits within the EU were implemented in section 12 (amended in 2024) and section 12a (newly added in 2024) of the German EU Mutual Administrative Assistance Act (in German: EU-Amtshilfegesetz, short EUAHiG). In addition, a new section 117e was added to the German Fiscal Code (in German: Abgabenordnung, short AO) in 2024, which clarifies that, under certain conditions, joint audits or simultaneous audits with third countries (i.e. countries outside the EU) are possible in accordance with the rules in sections 12 and 12a of the EUAHiG. For these third-country cases, regarding the exchange of information within the simultaneous or joint examination section 117e of the Fiscal Code refers to applicable international agreements. This particularly concerns bilateral tax treaties (which generally contain an article on exchange of information based on article 26 of the OECD model) and the 1988/2010 Convention on Mutual Administrative Assistance in Tax Matters (ratified by Germany by act of 16 July 2015).

Administrative guidance

The current administrative guidance agreed between the German Federal Ministry of Finance and the supreme authorities of the Länder on joint audits and simultaneous audits in the area of ​​direct taxes can be found in the "Merkblatt zur grenzüberschreitenden Prüfungszusammenarbeit mit Steuerverwaltungen anderer Staaten und Gebiete" (which may be translated as "Information sheet on cross-border audit cooperation with tax administrations of other states and territories") of 15 Mai 2025, published in the Bundessteuerblatt (Federal tax gazette) at BStBl. I 2025, 1181. This guidance of 15 May 2025 replaces earlier guidance of 9 January 2017 (the earlier guidance of 2017 is no longer applicable).

The new guidance is currently only available in German language. An English translation will be made accessible here as soon as available.

Definitions, aims and areas of application

Joint audits

Joint audits are administrative enquiries jointly conducted by the competent (German) tax authority together with the corresponding authority of another state in relation to one or more persons of common or complementary interest (section § 12a para. 2 sentence 1 of the EUAHiG, where applicable in conjunction with section § 117e of the AO). The central liaison offices of the participating states coordinate the manner in which the joint audit is to be carried out. The aim of the joint audit is reaching an agreement on the facts and circumstances that are the subject of the administrative enquiry and a consensual appraisal of the tax consequences on the basis of those facts (section § 12a para. 2 sentence 2 of the EUAHiG, where applicable in conjunction with section § 117e of the AO).

Central element of a joint audit is the endeavouring to reach agreement. The presence of officials from other states or territories within the country or the presence of domestic officials abroad may be part of a joint audit. 

A joint audit is particularly suitable if there is a concrete expectation (e.g. in matters concerning transfer pricing or permanent establishments, and matters concerning models of cross-border tax planning and tax avoidance)

• that a purely unilateral approach could result in double taxation or non-taxation in both states, and
• that such double taxation or non-taxation in both states could be avoided by a cross-border agreement during the audit.

Simultaneous controls

Simultaneous controls are administrative enquiries simultaneously conducted by the competent German tax authority and by the corresponding authority of another state in relation to one or more persons of common or complementary interest, in order to exchange the collected information (section § 12 para. 2 sentence 1 of the EUAHiG, where applicable in conjunction with section § 117e of the AO). Conducting simultaneous controls is coordinated by the central liaison offices of the participating states. Simultaneous controls are characterized by each authority conducting coordinated enquiries within its own territory and then communicating the information obtained to the other authority. This other authority can use the information obtained for tax purposes.

The aim of simultaneous controls is simply to exchange the information obtained.

Simultaneous controls are particularly suitable if

• there is a concrete expectation that a purely unilateral approach could lead to double taxation or non-taxation in both states, the state with which cooperation is being considered cannot or does not want to carry out a joint audit, and the exchange of information in the event simultaneous controls could at least reduce the risk of double taxation or non-taxation in both states, or
• simultaneous controls make it possible to obtain access to information which would not be accessible or would be difficult to access without the simultaneous controls (irrespective of whether the national examination possibilities have actually already been exhausted), and there is no expectation that a purely unilateral approach could lead to double taxation in relation to the state with which cooperation is being considered.

Competent Authority

In Germany, the Federal Central Tax Office (in German: Bundeszentralamt für Steuern, short BZSt) is the central liaison office responsible for coordinating cross-border audit cooperation in joint audits and simultaneous controls. Within the BZSt, the task of coordinating cross-border audit cooperation in joint audits and simultaneous controls is dealt with in Division Bp 27 (in German: Referat Bp 27). 

More information

More information – on how joint audits and simultaneous controls can be initiated, on the further process after initiation, on the joint final report in the case of joint audits – is available in German language here.

The information provided there is primarily directed at German auditors and taxpayers in Germany. It reflects contents of the guidance of 15 May 2025 mentioned further above. This guidance of 15 May 2025 is currently only available in German language. An English translation will be made accessible here as soon as available.