Growth Opportunities Act: DStV Expresses Concerns About the Proposed Reporting Requirement
The German Association of Tax Advisors (DStV) has issued its statement regarding the Federal Ministry of Finance’s draft bill on the Growth Opportunities Act. The draft includes positive measures to ease the burden on the economy, particularly for small and medium-sized enterprises. Nevertheless, the DStV still sees room for improvement, especially regarding the planned reporting requirement for domestic tax planning.
Bureaucratic hurdles and mistrust due to planned reporting requirement
According to the explanatory memorandum, the introduction of a reporting requirement for such tax arrangements is intended to detect unintended loopholes in the law at an early stage and support tax assessment. Intermediaries, such as the tax advisory profession, are primarily expected to fulfill this obligation. However, from the DStV’s perspective, this means a renewed increase in bureaucratic hurdles. Furthermore, this measure leaves a bitter aftertaste of mistrust. This is particularly frustrating because, during the COVID-19 economic relief efforts, tax advisors were entrusted with the role of trusted auditors—and rightly so. The federal and state governments trusted the profession during the crisis and placed the responsibility for preventing abuse in their hands, which also entailed bureaucratic consequences. Against this backdrop, the DStV views the planned reporting requirement for domestic tax planning as a slap in the face. Therefore, the DStV calls for this planned introduction to be abandoned.
Positive news regarding sales tax and e-invoicing
One piece of positive news concerns the regulations on sales tax and the introduction of e-invoicing. The requirement to issue e-invoices is to be phased in over time. In 2025, businesses will be allowed to issue invoices both in paper form and in an electronic format that does not meet future e-invoicing requirements—provided the recipient agrees. For transactions in 2026 and 2027, the option of paper invoices in the B2B sector will no longer apply. Instead, businesses may use alternative electronic formats, provided they are transmitted via the EDI channel. Small-amount invoices remain exempt from the e-invoicing requirement. Starting in 2028, all businesses will then be required to issue e-invoices for B2B transactions. The DStV generally welcomes these plans but calls for relief measures for small businesses subject to VAT.
There is also good news for small businesses subject to VAT. Starting with the 2023 tax period, they will generally no longer be required to file VAT returns—which means less red tape! The DStV supports this initiative.
Conclusion
Overall, the DStV’s statement on the Growth Opportunities Act shows that there are positive aspects that will ease the burden on the economy. Nevertheless, there are still some points that the Association of Tax Advisors believes should be revised, particularly the planned reporting requirement for domestic tax planning and relief measures for small businesses subject to sales tax. The hope is that lawmakers will take these comments into account and optimize the law accordingly.
