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Tax auditing in gastronomy business

For the tax authorities, catering and gastronomy businesses are considered as risk industries. In case of an external inspection according to § 193 AO (German general tax code), business owners should be prepared for the fact that tax auditors, specialized on catering and gastronomy businesses, will review all business documents for irregularities. The auditors are armed with various guidelines and key figures as well as special testing software (IDEA). If there are gaps in their bookkeeping or serious shortcomings, the exam is quickly over and the tax office is entitled to estimate profits. Since a tax audit generally takes place retroactively for up to three years, the total back payments for sales, income tax and, payroll taxes and social security contributions can quickly add up to a six-figured amounts.

The general frequency of tax audits depends on the size of the business. While large-scale corporations are thoroughly tested, audits on small and medium-sized enterprises are carried out at an average interval of 11 and 21 years. In addition, the tax office conducts event-related examinations if it recognizes a need for examination. Some of the more classic signs that justify a need for examination are:

  • Income from the business is not sufficient to cover the need for life and there are no other sources of revenue
  • Too high cash balance
  • Too low staff costs or too many part-time employees
  • Anonymous notices from suppliers or customers

Criminal procedures due to breach of tax law

Beside the existence-threatening tax payments, criminal consequences are also to be feared, which can lead to additional penalties or imprisonment.

German gastronomy law


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