German Ministry of Finance Updates Rules for Electronic Record-Keeping

The German Ministry of Finance (BMF) has released an updated circular on March 11, 2024, revising the GoBD principles, which govern the proper keeping and storage of books, records, and documents in electronic form. This update addresses changes in tax law implemented in 2021.

The GoBD principles are crucial for ensuring that business records are recognized as valid evidence by tax authorities. Non-compliance can lead to additional tax assessments or penalties during external tax audits. The principles include traceability, verifiability, accuracy, completeness, and immutability of records.

A significant aspect of the revised circular concerns data access for tax authorities. During external audits, tax officials can now inspect stored data, request preparation of data, and receive it in a machine-readable format for transmission. They are also permitted to store and process this data, even on mobile devices.

Further changes include updated regulations on making electronic accounting data available via specified digital interfaces and through an exchange platform. The circular also provides new guidance on the relocation of electronic accounting to EU member states or third countries and clarifies the process for data transfer, including the eventual erasure or return of data carriers after the audit concludes.

The update aims to align record-keeping practices with current digital technologies and legal requirements, emphasizing the accessibility and integrity of electronic financial data for tax purposes.