IT IS REAL NOW: PROCEEDINGS BEFORE THE TAX COURT
The tax auditor is not open to discussion? Your tax assessment is giving you a headache? And the appeals procedure has not been successful? Then it is time to defend yourself and take legal action. It is the duty of the judiciary to enforce (tax) law and regulations when they are at risk of disappearing in the maze of taxation.
Lawsuits in tax court
As two-in-one attorneys-at-law and tax advisors, we can gladly conduct tax court proceedings for you. We are also happy to scrutinise the facts, if necessary in cooperation with your tax consultant.
Every detail is important
If you sue in a tax court, you should be as open as possible with your legal counsel. This is the only way they can clearly present the facts of the case – and this is particularly important in tax courts. Unlike in other branches of the courts, there is only one trial court. This means that anything you have not told your lawyer or have not presented to the tax court cannot be claimed at the higher level: Germany’s Federal Fiscal Court (Bundesfinanzhof). This fact has already caused many promising proceedings to fail.
Conducting a lawsuit professionally
Take advantage of our expertise and experience in tax law, even if the legal situation does not look good. We have already succeeded in a number of cases in getting the courts to revise their position, – thus ensuring that we help our clients secure what is right.
In legal procedures, the legal argumentation in tax-related questions is even more important than during a tax audit We often must explain in court why a particular ruling of the Federal Finance Court is relevant to the dispute – or not.
NOT TO BE UNDERESTIMATED: THE TIME FACTOR
If you sue in tax court, you need a lot of stamina. Such a proceeding typically takes about two years; in more complex cases it can take much longer.
WANTED: A MUTUALLY ACCEPTABLE SOLUTION
Even during ongoing legal proceedings we try to negotiate an amicable solution with the authorities. Sometimes this can be done after the court has given an appropriate signal. Here, the courts often refer to our argumentations. While such an agreement may not always be the best outcome you imagined, it is often more efficient than a lengthy case that may have to be heard before the Federal Fiscal Court (Bundesfinanzhof).
ALSO POSSIBLE: A DISPUTE UNTIL JUDGMENT
Of course, we are also happy to argue your case through to the end if fundamental questions of tax law need to be clarified, or if the tax authorities are unwilling or unable to reach what you consider a sensible agreement.
After one judgment comes the next judgment. If one side (or even both) is not convinced by the court’s decision, they can try to obtain a different ruling from the German Federal Fiscal Court (Bundesfinanzhof). However, it is not easy to get the Federal Fiscal Court to deal with the substance of a matter. (We have explained this in connection with the proceedings before the Federal Fiscal Court [Bundesfinanzhof]).
COSTS OF A LAWSUIT IN TAX COURT
Compared to other branches of the court system, tax court proceedings are comparatively inexpensive. Nevertheless, it is worthwhile to include the court costs in your overall calculation. The following brief overview gives you a rough outline of the different cost categories.
If push comes to shove, we will be happy to provide you with a detailed estimate for your specific case.
- Advance payment
As the plaintiff, you are required to pay an advance on costs to the court before you file a suit. The payment depends on the amount in dispute, but will be at least €284.
- Court fees
The court costs are paid by the party that loses the proceedings. If you win in full, your advance payment will also be reimbursed by the revenue office. If both parties achieve a partial victory, the court will prorate the costs.
Please note: Court costs can be reduced if the parties reach an agreement and, after the corrected tax assessments have been issued, declare the case closed – or if a lawsuit that has become hopeless is withdrawn.
- Legal fees
If you win in full, the revenue office will reimburse your legal fees in accordance with the Act on the Remuneration of Lawyers (Rechtsanwaltsvergütungsgesetz). If you win only partially, you will only be partially reimbursed for your expenses. However, the tax court can also specially order that each party must carry their own costs – in which case you will not be reimbursed for legal fees.
However, if you have agreed with your lawyer to be billed by the hour and the Costs are higher than the statutory fees due to the complexity of the proceedings, the difference will not be reimbursed.
If you win, the tax court may also decide that the revenue office must reimburse you for the costs of representation in the appeals procedures. In the absence of such a decision, you will bear your own costs in the appeals procedures.
- Experts and specialists
It is not uncommon for the costs of tax court proceedings to rise unexpectedly because the court calls in experts and specialists. These costs are the responsibility of the losing party, or are paid pro rata by both parties.
- Costs of the revenue office
Irrespective of the outcome of the proceedings, you will under no circumstances have to pay the revenue office’s costs. This is different from civil proceedings, for example, where the losing party always has to pay the costs of the winning party.