Any tax consultant who advises online traders will regularly be in the ears of his clients, but please prepare a procedural documentation.
Online merchants who have been audited by the tax office in recent months - e.g. as part of a Value Added Tax special audit or tax audit - will most likely have been asked about their procedural documentation.
What's behind all this?
Procedure documentation: What is that?
One of the essential tasks of procedural documentation is to map the processes with regard to all tax-relevant data and data streams - for a competent third party, e.g. a tax auditor.
Note: This documentation is all the more important in online trading, as a tax auditor will hardly find any physical evidence or other tangible infrastructure to check.
Procedure documentation thus provides an overview of how, for example, documents or transactions are posted in a company and then permanently archived. It must be possible for a tax auditor to understand the business processes of the audited company within a reasonable period of time. Furthermore, it must be shown that the audited company complies with the so-called GoBD.
GoBD stands for: Principlesfor the properkeeping and storage of books, records and documents in electronic form as well as for data access.
For example, the GoBD require that once a booking has been created, it cannot be permanently deleted. Only a reversal may be possible, which means that the original posting can still be determined, even if it was incorrect or was triggered by mistake.
Procedure documentation thus pursues the following purposes, among others:
- Representation of the business processes of the company
- Presentation of compliance with the GoBD by the company
It must be taken into account that the content of the procedural documentation must not only be written down but also lived in the company.
Procedure documentation: Do I need it?
According to the GoBD, all companies are obliged to provide procedural documentation. There is no exception for smaller companies.
The GoBD do not represent a directly applicable law, but are initially only an internal administrative instruction. However, it must be taken into account that every tax official - including every tax auditor - is bound by the GoBD. If no procedural documentation is available, this can lead to lengthy disputes with the tax authorities.
From a practical point of view, there is therefore no way around preparing and providing procedural documentation.
Note: In the guest article by our partner Ecovis you can take a closer look at the opportunities and risks that the topic of procedural documentation brings with it.
Procedural documentation: What must it look like?
According to the GoBD, procedural documentation should have the following structure.
- General part: The general part describes in particular the operational organisation and the operational structure of the company
- User documentation: The user documentation describes how the different software solutions are to be used by the users
- Operational documentation: The operational documentation describes how the technical processes have to look like. In the following you will see a small extract from the Taxdoo procedure documentation.
- Technical description: the technical description contains all the necessary information on the technical infrastructure of the company
Note: Together with the tax auditor Andrea Köchling (in a non-official capacity), we have started the webinar series Fiscal Administration Meets Online Commerce, in which GoBD is the central theme. If you missed the kick-off event, you can check it out again in our blog post.
Taxdoo procedure documentation
Taxdoo maps the essential Value Added Tax- and financial accounting processes for companies in online trade, so that a large part of the processes for the so-called tax determination run over our platform.
In the following you can see the current feedback of a tax consultant with a focus on online business.
... Nice to see, and this will please you, were the preliminary findings of the audit. Since the assumption of the mandate, the bookkeeping has been based on the Taxdoo DATEV Export. In the year of the change to us and the resulting in-depth accounting changeover, the auditor carried out rough audits, found no differences and approved the year. This was a great result for us, as the auditor confirmed our work in writing. As this is based on their export, I would like to share and pass on the praise.
In the Taxdoo procedural documentation, therefore, the special features of online trading in particular are mapped.
Retrieval Taxdoo procedure documentation
You or your tax advisors can access the procedural documentation in the Taxdoo Dashboard under the "Topics" tab.
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