The 2009 Annual Tax Law Act, which came into force on 1 January 2009, contains a provision which allows enterprises to relocate their electronic bookkeeping abroad. For such relocation to be accepted, the following conditions must be met:
• the relocation is to a member state of the EC and EEA;
• the state to which the bookkeeping is to be relocated allows the German authorities to recall data;
• information is provided to the tax authorities regarding the location of the data system which conducts the electronic bookkeeping;
• the taxpayer has fulfilled all tax obligations in the past; and
• access to the data is given to the German tax authorities to the fullest possible extent.
The regulation contains an exclusion clause which provides that the German tax authorities may allow relocation even if the first three requirements are not met to the extent that the relocation will not limit German taxation.
The Association of Swiss Enterprises in Germany (Vereinigung Schweizerischer Unternehmen in Deutschland, “VSUD”), together with the Regional Tax Office (Oberfinanzdirektion, “OFD”) of Karlsruhe looked into the question of whether such a relocation to Switzerland could be granted.
Citing a decree of the German Federal Ministry of Finance on the matter, which is expected to be published in the near future, the OFD Karlsruhe declared that in order for relocation of electronic bookkeeping to a place outside the EC and the EEA to be allowed, all of the other above-mentioned requirements must be fulfilled. In this regard, the destination state’s allowance of Germany’s data recall rights was seen as the most important aspect for the German authorities as well as the greatest hurdle for taxpayers.
In November 2008 as well as in March 2009, Switzerland announced that the recall of such data by the German authorities would be an offense under Swiss criminal law unless special permission was granted by the competent Swiss authorities. Initially, the Swiss Federal Department of Finance (“FDF”) announced that such permission had to be applied for by the German authorities, thereby strongly aggravating relocation to Switzerland since the German provision states it is the taxpayer’s obligation to obtain such permission.
In a statement from 19 June 2009, the FDF has now announced that application for permission to recall data can be filed not only by the German tax authorities but also by third parties. In regard to the substantive law, the FDF stated that it sees no general obstacles to granting such permission but that each application will be determined on an individual basis. The FDF has competent authority to deal with the applications which can be filed directly with the FDF.