Updated GoBD guidelines from the Federal Ministry of Finance. What has changed? What is set to change?

In October, the Federal Ministry of Finance (BMF) presented a draft of an updated version of the Principles of Proper Management and Retention of Books, Records and Documents in Electronic Form and on Data Access (GoBD). In doing so, the BMF is fulfilling its objective of adapting the GoBD to current technical, organisational and professional developments. The draft was sent to various professional associations with a request for comments by 12 November 2018. It remains to be seen to what extent any suggestions or criticisms raised in this context will be taken into account in the future.

Changes to the GoBD regulations

The GoBD address two substantive points:

  • Replacement scanning
  • Conversion to in-house formats as part of the archiving process

In addition, there are also specific amendments relating to other topics, for example, the fact that cloud-based systems may also be classified as main, auxiliary or secondary systems within the scope of the GoBD. However, the document does not contain any changes to the compliance requirements themselves, nor does it provide any further clarification regarding the requirements for traceability, completeness, accuracy, timeliness, orderliness and immutability.

To date, the admissibility of digitising supporting documents and their subsequent destruction has been based solely on the technical process of scanning. This is permitted provided that there is procedural documentation for the process, provided that the original documents are not required to be retained by law and the scanned document is a faithful visual representation of the original.

According to the BMF’s GoBD guidelines, all methods of capturing images are to be treated equally in future. These include scanning, on the one hand, and photography is explicitly mentioned on the other; however, this list is not exhaustive.

Photographic recording is also permitted abroad

Furthermore, under the GoBD, digital recording is also permitted abroad if the documents in question were created or received abroad and are recorded there. Receipts from a business trip abroad are cited as an example of this. However, the general requirements for substitute scanning must be met, which in practice will often not be feasible. Furthermore, substitute scanning is generally to be permitted abroad. In this context, the removal of paper receipts abroad is permitted.

With regard to the conversion of documents into in-house formats for archiving purposes, the current practice has been that, in principle, both versions must be archived, assigned to the same record and managed under the same index. The converted version must be identified as such. In future, it will not be necessary to retain both versions, provided the following requirements are met:

  • no changes to the images or content
  • no loss of other information subject to retention requirements
  • Documentation of the procedure for correct and loss-free conversion is available
  • no restrictions on machine-readability or data access.

Both of the concessions included in the GoBD were also set out in the „Submission by the Federal Chamber of Tax Advisers on practical problems in the application of the GoBD“ dated 24 July 2018. However, further suggestions – such as the provision of a continuously updated list of non-tax record-keeping obligations or a list of documents subject to retention requirements – were not adopted by the Federal Ministry of Finance (BMF).

Breaches will result in additional assessments

Glaring breaches of the GoBD may result in the entire set of accounts being rejected. At the very least, they will serve as leverage for the tax audit to enforce additional assessments in the range of 5 to 10 % of turnover.

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Source: Dr Johannes Riepolt