Shift in Tax Audit Practices: Decline in Audits within Corporate Entities
In an interview with Süddeutsche Zeitung, Anne Brorhilker, a former public prosecutor and managing director of the Initiative Finanzwende, expressed concerns over the significant decrease in tax audits in companies over the past decade. According to the report, the number of tax audits has dropped by almost 60%, reaching around 140,000.
Brorhilker, who heads an organization focused on financial issues, criticized this trend and advocated for strengthening the tax authorities. She argued that a robust tax system is crucial for upholding the rule of law and democracy.
The decline in tax audits can be attributed to several factors. The shift towards digital and data-driven auditing approaches allows tax authorities to identify risks more efficiently without the need for extensive audits of all companies. Resource limitations within tax offices, where auditors are fewer, encourage prioritization of high-risk cases. Additionally, regulatory and political environment changes have led to more discretion and reliance on automated data analysis instead of traditional auditing.
These factors reflect broader trends discussed in contemporary German financial media and industry reports as of 2024–2025. The report also mentions staff shortages as another reason for the decrease in tax audits.
In 2024, the tax authorities employed 12,359 business auditors, which is nearly 10% less than in 2015. Despite the decrease in auditors, the Federal Ministry of Finance reported that 1.7% of businesses, or 146,516, were audited in 2023. Notably, the audit rate for large companies was significantly higher at 17.8% in the previous year.
Many auditors are assisting with other projects, such as the reform of property tax, within their own authorities. Brorhilker suggested that if the states are unable to hire enough staff, the federal government should provide assistance.
The total amount of back taxes collected through these inspections has been decreasing on a long-term basis. As the tax system evolves, it remains to be seen how these changes will impact the effectiveness of tax audits in the future.
[1] Süddeutsche Zeitung report, 2024–2025.
Anne Brorhilker, critical of the decline in tax audits, advocated for strengthening the tax authorities to uphold the rule of law and democracy in business finance. The dropping number of audits can be attributed to factors such as digital auditing approaches, resource limitations, regulatory changes, staff shortages, and the redirection of auditors to other projects, as revealed in the 2024-2025 Süddeutsche Zeitung report.
