Some scammers are likely to mercilessly take advantage of the VAT system by getting reimbursed for payments they never made.

This is what experts assume.

The damage to the tax authorities is likely to be considerable.

For the European Union, the Kiel Institute for the World Economy and the Ifo Institute in Munich estimate sales tax fraud at 30 to 60 billion euros per year.

Manfred Schäfers

Business correspondent in Berlin.

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At a time when the SPD, Greens and FDP are looking for ways to finance investments in digitization, climate protection, infrastructure, education and research despite the debt brake, the fight against sales tax fraud could be a promising starting point.

Since the 1960s there has been a complex system that ensures that in an economy based on the division of labor, only the surplus value is taxed at each stage of production.

Otherwise, corporations would have a considerable advantage, since they do everything under one roof, from the extraction of raw materials to the sale to the end consumer.

One wants to prevent that.

Real-time control and blockchain

That is why there is a two-stage process: each company adds the sales tax to its claim on the invoice, which it must quickly pay to the tax office (even if it has not yet received the money). At the same time, he can have the sales tax paid, the so-called input tax, reimbursed by the tax office. As a result, only the surplus value is charged; but always - at least in theory.

In practice, this does not always go so smoothly because the tax authorities lose track of whether the sales tax has actually been paid by one company that wants to be reimbursed by another. The Federal Audit Office warned a year ago: "From the tax authorities' point of view, the interplay between sales tax and input tax harbors two starting points for fraudulent tax losses: on the one hand through unpaid sales tax amounts, on the other hand through incorrectly reimbursed input tax amounts."

In its report, the authority promotes the use of the opportunities offered by digitization.

She is pushing for a combination of real-time control and blockchain.

By transmitting the data to the day, it would be possible to determine who issued which invoices and when and how much sales tax was to be paid.

Input tax refunds would then result directly from the data stored in the blockchain.

Italy as a model

Karl Heinz Krug from the consulting company Capgemini Germany sees Italy as a role model - of all things, the country that has a reputation for showing a certain Mediterranean nonchalance in tax matters. Tourists who are out there know better: there is a receipt for every espresso and every ice cream. If you don't want to risk trouble with the financial police, you should keep it until the potential corpus delicti has been drunk or eaten.

Since 2019, not only end consumers have been strictly controlled.

"Italy is one of the European countries that has successfully intervened in sales tax fraud and sales tax evasion," reports Krug.

There is now an obligation to create invoices electronically.

These would be transmitted to the invoice recipient in a specified data format via a central register.

For the former mayor of Bad Homburg, the advantage is obvious: This procedure enables the financial administration to immediately check payments electronically.

Missing reporting system

In Germany, federalism, in conjunction with the usual forces of inertia, prevented such a system.

The Scientific Services of the Bundestag assume that the Italian system can in principle be introduced in this country.

"It does, however, require a tried and tested IT system that does not currently exist in Germany," they point out.

There is no electronic reporting system, neither for the creation nor for the checking and forwarding of invoices.

Only public clients are required to have an e-bill, but this is not done uniformly in the federal and state governments.

At best, this could be understood as a preparatory measure for a clearance system.

The changeover in 2019 paid off for Rome.

“Italy generated 3.6 billion euros in additional income in the first year of its introduction,” emphasizes consultant Krug.

Not only the revenue from VAT has increased.

In income taxes, too, 600 million euros more came in because the tax office would have seen better who was earning what.