Digitization of the business tax assessment Relief for 3.9 million businesses

Uniform, future-proof standards reduce bureaucratic burdens. For example, when companies spend less time and money processing paper-based notices, there is more room for “Made in Germany” innovations. This is a goal we are working toward under the leadership of the Hesse Ministry of Finance and the Federal Ministry of Finance (BMF) in the OZG Tax & Customs initiative. As a result, since April 2023, approximately 3.9 million companies, as well as over 50,000 tax consulting firms and corporate tax departments, have been able to request a digital and machine-readable trade tax notice.

Background and Objective

Until now, there have been 600 different paper formats for trade tax assessment notices in Germany, each managed independently by 11,000 municipalities. For large companies with multiple locations in particular, manually reviewing and processing these notices involves a great deal of effort. The goal of the OZG project is therefore to create a seamless process in which information and notices related to trade tax are transmitted digitally. The digitization of administrative processes promises municipalities reduced processing costs and offers businesses subject to trade tax and their tax advisors simpler handling.

One size fits all

We have laid the groundwork to ensure that the nationwide standardized notice – from the submission of the trade tax return to its delivery to the company’s digital mailbox – can be processed smoothly. On behalf of the Hessian Ministry of Finance, the task was to coordinate and harmonize the various requirements of the 16 federal states, the Federal Ministry of the Interior and Homeland (BMI), the pilot municipalities, as well as companies and specialized software providers.

The solution: A nationwide standardized data format based on PDF/A3 for the trade tax notice. The electronic transmission of data via ELSTER Transfer was specifically upgraded for this purpose. At the same time, we prepared 18 providers of municipal budget, cash management, and accounting systems (HKR system providers) for the conversion of their software – in working groups, we provided early information on the new specifications and supported the development of the interfaces.

Pilot and Rollout 

Before the rollout to all German municipalities, the usability of the new process was extensively tested. Sixty committed municipalities participated in the pilot program. About 30 of them tested the digital notices in collaboration with their HKR system providers and pilot companies.

With positive results, companies and tax advisors can now choose directly when filing a trade tax return whether they would like to receive the trade tax notice digitally. Provided the responsible municipality meets the organizational and technical requirements, they will receive the trade tax notice in digital form.

Since this is not yet possible in many municipalities, the steering group chose an innovative approach to match supply and demand: By specifying their preference for electronic delivery in “Mein ELSTER,” companies provide municipalities and states with valuable information on the demand for the new service. Companies face no disadvantages: Municipalities will continue to automatically send the standard trade tax assessment notice on paper as long as the transition to the digital format is underway.

This means that municipalities now have all the infrastructure components in place for the successful and legally compliant electronic notification of digital trade tax assessments – and thus also for compliance with the Online Access Act.