Selling in Germany offers excellent business opportunities, but it also requires strict adherence to local tax regulations. If you ever receive a compliance check notice from the tax authority, it is crucial to understand what it means and how to respond properly in order to protect your business.

What is a compliance check?

A compliance check is an audit on a VAT-registered business conducted by the tax authority.  

The audit process can involve an examination into several aspects of your tax history, such as whether there is legitimate trading activity, whether you have submitted accurate tax returns, and whether there are any late or missing payments.   

It is important to note that receiving a compliance check notice does not automatically mean that you are non-compliant – the tax authority routinely audits VAT-registered businesses to ensure compliance.  It is therefore crucial to understand why you have received a compliance check notice in the first place. 

Common triggers and potential risks

Compliance checks can be initiated by the tax authority for numerous reasons. The most common of these include:

• Routine audits that are unrelated to any specific compliance issues
• Potential discrepancies in previous filing submissions
• Potential discrepancies with third-party platform transaction data (e.g. Amazon)
• Verification of tax reclaim requests

Once a formal compliance check has been initiated, the business being audited will receive a postal notice, and a proper response is required within the provided deadline. 

Failure to respond to the notice properly or in time may result in severe consequences.  These consequences might include:

• Suspension of seller accounts on major selling platforms
• Financial penalties including fines and interest
• Tax reclaim rejection
• VAT deregistration

The resolution process

We are here to help.  Our compliance check service offers an end-to-end resolution process: 

• We investigate and assess the actual reason behind your compliance check notice
• We negotiate deadlines with the tax authority 
• We rectify any potential issues identified
• We provide a full explanation to the tax authority and push for reduced penalties

Why choose TBA Global?

As many compliance checks involve complex technical tax issues, it is highly recommended to consult a professional advisor.  With TBA Global’s expert compliance team here to support you, receiving a compliance check notice no longer needs to be daunting.  

We have extensive experience in providing professional representation, deadline and risk management, and vital financial protection to our clients.

Whether you are registering for VAT for the first time and want to build a solid foundation, or you have previously registered or filed VAT through another provider, we can support you.