If a taxpayer legally doubts a tax notice of his tax office, he has the opportunity to file an objection with the tax office. If the tax office continues to insist on its assessment, the taxpayer is left with only the action in the competent tax court. Thus, the tax court constitutes the first instance in the jurisdiction on taxes in Germany. In its judgment, the Finance Court then also determines whether it allows the possibility of revision at the next higher instance, the Bundesfinanzhof. The Bundesfinanzhof is thus the second court in tax matters in Germany. At the same time, the Bundesfinanzhof is also the highest authority in the financial jurisdiction. A revision before the Federal Finance Court is only possible if the facts to be clarified are of general importance or if legal deficiencies are to be eliminated. If the tax court in the first instance excludes a revision, then you can file a non-admission complaint with the Federal Finance Court.

In the video we explain to you the legal remedies objection to the tax office and complaint to the tax court as well as the revision by the Bundesfinanzhof.

Often it happens that a tax assessment is different in some aspects than initially accepted or hoped by the taxpayer. Therefore, if, from the point of view of the taxpayer, the examination of the notification should give rise to a correction, he can make this known to the tax office in two ways. On the one hand, he can submit an application to the tax office for a simple change. On the other hand, the taxable person may instead lodge an appeal as an appeal. In addition, an appeal may be accompanied by a request for suspension of execution. This delays the payment of the tax to a point in time after the notification of the opposition decision.

But what happens, even if the appeal decision of the tax office is anything but convinced? Well, in such a case, the question must be clarified in court.

We have created this article with the aim of informing you about the financial jurisdiction in Germany. In addition, we also explain important details about the tax procedure in the courts involved.

However, if a tax court confirms the opinion of the tax office, then a taxpayer is left with only one remedy with which to challenge the decision: the appeal procedure before the Federal Finance Court. But the tax office is also entitled to file an audit before the Federal Finance Court. The Bundesfinanzhof is the highest authority in tax proceedings in Germany.

Suppose a taxpayer expected a different outcome in the appeal decision, and decides that he wants to file a claim with the tax court. This leads to tax proceedings before the financial jurisdiction. Various aspects are important here.

With regard to a possible minimum value of a lawsuit in the tax court, there is no lower limit that one would have to consider. However, in practice it makes perfect sense to go to court only with a higher tax amount. But more on that later.

In principle, a representation of the taxpayer before the tax court is also possible by himself. However, there is little chance that a simple error will give rise to a lawsuit in the tax court. Such simple matters are usually to be clarified by a simple amendment request or by objection. So it is in particular matters that are important both in terms of the amount of the controversial tax amount and the legal assessment, which one would like to have the tax court clarify. Therefore, in principle, a complaint to the tax court only makes sense if there are actually weighty arguments for a change in the tax assessment. Legal preparation for and representation in the process should be correspondingly good. After all, you want to go into the process with the greatest possible chance of success. For this reason, the professional support of lawyers, tax consultants or auditors makes sense from the outset.

Basically, the tax court conducts a re-examination of the defendant facts. Thus, as a plaintiff, one should ensure that all information that is relevant in the judgment is available to the tax court. On the other hand, subsequent submission of further evidence is inadmissible. But we will come back to that later.

The tax court also examines whether all tax aspects have been taken into account so far. This includes, among other things, earlier decisions of the tax courts and the Federal Finance Court. On this condition, too, one should go to the trial in a legally prepared manner.

The judgment of the Finance Court is at least partially binding. Even at a higher level, there is no re-examination of the facts submitted to the tax court. Therefore, the action before the tax court provides the last opportunity to present tax-relevant facts effectively.

In addition, the Finance Court determines whether a revision by the Bundesfinanzhof is permitted at all. From the point of view of the tax court, a review is only possible if the facts are of general interest. This means the condition that the facts on the one hand do not constitute an isolated case and are therefore also relevant for the taxation of other taxpayers. But also the criterion that the clarification of the submitted case contributes to a unification of case law in Germany and thus to a generally valid application is a good reason to allow the revision to the Bundesfinanzhof.

However, a revision of the judgement of the Finance Court can also be achieved via the Bundesfinanzhof.

If the Finance Court excludes the revision to the Bundesfinanzhof, the option still remains to file a so-called non-admission complaint against the exclusion of the revision. This complaint is addressed to the Bundesfinanzhof. The latter then decides whether to allow a revision. In this case, it can also be checked whether there is a further requirement for a revision. Because if there are doubts about the legal interpretation of the tax court, then this must also be clarified via the appeal procedure at the Federal Finance Court.

By the way, the means of revision after going to the tax court is open to both the taxpayer and the tax office. However, while the taxpayer is usually associated with the intention to optimize his tax, for the tax office in particular the clarifying interpretation of the law is in the foreground of the revision.

Unlike the Finance Court, only authorised representatives are allowed to represent in an appeal proceedings before the Bundesfinanzhof. Therefore, only lawyers, tax consultants and auditors are eligible as eligible representatives. Therefore, representation by the taxable person himself is excluded.

We have already briefly mentioned another difference to the tax court proceedings. Thus, the re-examination of facts by the Bundesfinanzhof is excluded. While the Finance Court is both a factual authority and a legal authority, the Bundesfinanzhof is merely a legal authority. In other words, the Bundesfinanzhof is only responsible for legal issues. That is why it is so important that all the facts concerning the case must already be known to the tax court.

Finally, the Bundesfinanzhof pronounces a judgment in the last instance. In principle, the judgment has general validity. Henceforth, all tax offices and tax courts must observe and implement the legal interpretation established in the judgment in matters corresponding to those analysed in the appeal proceedings.

In addition, the judgment can also have other implications. On the one hand, it may happen that the Federal Finance Court finds reasons for a violation of previously applicable tax laws against the Basic Law. In such a case, the Bundesfinanzhof refers to the Federal Constitutional Court in Karlsruhe. On the other hand, a judgment of the Bundesfinanzhof may give rise to the presumption that the aspect examined in German law does not comply with higher-level law at the level of the European Union. So the judgment of the Bundesfinanzhof opens the door to the European Court of Justice (ECJ). A judgment made by these two higher-ranking courts can then reverse the decision of the Bundesfinanzhof and also bind it in the future.

First of all, it should be noted that neither the Finanzgericht nor the Bundesfinanzhof are competent to clarify criminal proceedings regarding potential tax evasion. This is the responsibility of the criminal courts. Thus, the district courts and district courts as well as under certain circumstances the higher authorities are involved in tax criminal cases.

Furthermore, as a taxpayer, you should always keep an eye on the costs that a lawsuit in a tax court can contain. Because for legal disputes that require thorough legal preparation, it should already be about taxes that amount to more than a few thousand euros. In addition, the court costs are based on the respective amount in dispute and this in turn on the amount of tax that is the subject of the hearing. However, in order to determine the court costs, an amount of EUR 1,500 is legally prescribed as the lower limit for the amount in dispute. This does not apply to procedures involving child benefit. This is because there is no legal minimum for determining costs.

Speaking of costs. It remains to be clarified who will bear the costs of a lawsuit in a tax court or the Federal Finance Court. Thus, this is usually the party that is subject to litigation. This means that she covers both the court costs and the costs of the other party as well as, of course, her own. However, there is an exception, because even if the tax office triumphs, it bears its costs itself.

By the way, one can try to avoid a future dispute in the tax jurisdiction by submitting the matter in question to the tax office in advance for legal examination. Through this request for binding information, it can be achieved that the tax office consistently adheres to the legal opinion provided in the information later on in taxation. But this information is also associated with costs. And, of course, the tax office can also come to a legal opinion that is contrary to the one submitted for examination. In this case, a clarifying judgment by the financial jurisdiction is then probably necessary.