Shift in Audit Practices: Decrease in Tax Audits within Corporations
The decrease in tax audits of German companies and its impact on tax revenue has been largely influenced by staff shortages and the increasing complexity of audits, according to reports such as the one published by the Süddeutsche Zeitung in 2024.
In 2024, German tax authorities faced significant challenges due to staff shortages in tax audit departments and the growing complexity of audits. The staff shortages limited the manpower available for extensive audits, while the complexity was driven by new digital requirements, changes in tax regulations, and additional compliance burdens.
The growing complexity of audits was further exacerbated by enhanced data management and audit systems, which aimed to improve audit efficiency but initially contributed to complexity and transition challenges within audit processes.
These challenges have led to a reduction in the number and scope of tax audits carried out on German companies, affecting overall tax revenue collections. The report does not provide direct numerical data on the precise scale of revenue impact, but the context from 2024 and early 2025 shows a clear linkage between staffing constraints, audit complexity, and audit outcomes in the German tax system.
The total number of tax auditors employed by authorities in 2024 was 12,359, which is almost ten percent less than in 2015. In the previous year, the rate of audits for large companies was significantly higher at 17.8%. However, the report does not specify whether the staff shortages are affecting all types of tax audits or only specific ones.
Anne Brorhilker, a former public prosecutor and managing director of the Initiative Finanzwende, criticized the trend, stating that strengthening the rule of law and democracy requires a significant increase in personnel and structure for tax authorities. Brorhilker suggested that if the states are unable to hire enough staff, the federal government should provide assistance.
The states have cited staff shortages as a reason for the decrease in tax audits. In October 2024, the Federal Ministry of Finance reported that 1.7% of businesses, or 146,516, were audited in the previous year. The number of tax audits in companies has decreased by almost 60% over the past decade, with around 140,000 audits in 2024.
Additional auditors generate many times the revenue they cost to employ, making it crucial to address staff shortages and audit complexity to maintain tax revenue collections. Ongoing reforms and digitalization efforts, such as the tax administration’s GoBD updates and the B2B e-invoicing mandate, reflect ongoing attempts to modernize and adapt the audit framework despite these challenges.
[1] Süddeutsche Zeitung. (2024). Die Steuerprüfungen fallen weg: Wie die Bundesregierung die Steuereinnahmen verliert [Tax audits are disappearing: How the federal government is losing tax revenue]. Retrieved from www.sueddeutsche.de/wirtschaft/steuerpruefungen-fallen-weg-wie-die-bundesregierung-die-steuereinnahmen-verliert-1.5825209
[5] Süddeutsche Zeitung. (2025). Steuerprüfungen: Warum die Bundesregierung die Steuereinnahmen verliert [Tax audits: Why the federal government is losing tax revenue]. Retrieved from www.sueddeutsche.de/wirtschaft/steuerpruefungen-warum-die-bundesregierung-die-steuereinnahmen-verliert-1.5865702
The growing staff shortages and increased complexity of tax audits have posed significant challenges for the financial management of German businesses, as reported in the Süddeutsche Zeitung in 2024. Due to these factors, the number of tax audits carried out on German companies has significantly decreased, potentially impacting the overall revenue collected by the government.
