New circular of the German Ministry of Finance (BMF) issued on the German Principles for the proper keeping and storage of books, records and documents in electronic form (GoBD)

GoBD adapted - new regulations, especially for data access

Due to various legal changes to the German Fiscal Code (AO) in the implementation of EU directives in 2021, there was a need for changes to the GoBD. The previously valid version of the GoBD of the year 2019 was adapted by the circular of the German Ministry of Finance (BMF) dated March 11, 2024. The changes relate in particular to data access.

Significance of GoBD

GoBD stands for "Principles for the proper keeping and storage of books, records and documents in electronic form and for data access". The GoBD regulate the basic principles that entrepreneurs shall observe for their books and other records in order to have them recognized by the tax authorities as evidence for tax purposes. A breach of the GoBD can lead to an additional estimate or, in the case of significant deficiencies, to a full estimate of the tax base during an external audit by the tax authorities. In such cases, there is a risk of high additional tax payments.

The most important basic principles of GoBD

For bookkeeping in electronic or paper form, the following requirements of GoBD shall be observed: 

• Principle of traceability and verifiability, 
• Principles of truth, clarity and continuous recording, 
• Completeness, obligation to keep individual records, accuracy, timely bookings and records, 
• Order and immutability.

Significant changes in the circular of the German Ministry of finance following the amendment of the the German Fiscal Code (AO)

By amending Sec. 147 AO, the tax authorities can, as part of an external audit of digital bookkeeping 

• inspect the stored data, 
• demand the preparation of the data and 
• also request them in a machine-readable form for transmission. 

 The external auditors may also store and process the data on a mobile device.

 The circular of the German Ministry of Finance dated 11.3.2024 indicates the main contents:

• Accounting is also deemed to be improper if the electronic data is not made available to the tax authorities in accordance with the specifications of one of the prescribed digital interfaces.
• In the case of small companies with profit determination according to the revenue surplus account (Sec. 4 para. 3 of the German Income Tax Act (EStG)), the fulfillment of the requirements for the records according to GoBD shall also be regularly assessed with regard to the size of the company.
• Regulations on the exemption from the obligation to keep individual records when selling goods to a large number of unknown persons against cash payment
• Additions to the kind of account and account type in the details for fulfilling the journal function
• New regulation on the relocation of electronic accounting to an EU member state or a third country
• New version for data transfer (so-called Z3 access) and the possibility of making the data available via an exchange platform for which the tax authority has opened access.
• The transfer of data also includes taking the data out of the taxpayer's sphere. Processing and storage of the data by the tax authorities is permitted regardless of the place of use. 
• Erasure of the data or return of the data carriers provided after the notices issued on the basis of the external audit have become final
• New version of the annex to the GoBD under the title "Supplementary information on data transfer" - with information on the description standard for data transfer, various digital interfaces and supported file formats of the IDEA verification software.