How can a time-series comparison be rebutted?
By examining the assumptions on which it rests. The time-series comparison sets weekly goods input against weekly revenue and infers from the highest mark-up achieved to the whole period. That holds only if purchase and sale fall within the same period, if range and prices remain largely constant and if no stock is shifted. Where one of those assumptions does not hold, the procedure is not measuring the mark-up but the shift.
This is first a question of arithmetic, not of law
The German Federal Fiscal Court tied the time-series comparison to narrow preconditions in its judgment of 25 March 2015 (X R 20/13) and held it unsuitable in particular where the relationship between goods input and revenue is not largely constant in the business. But the objection works only if it is documented: the assertion that the range of goods changed is worthless as long as it does not follow from the purchasing data.
The assumptions and how to test them
| Assumption of the method | Where it can break | What it follows from |
|---|---|---|
| Purchase and sale fall in the same period | stockholding, bulk packs, promotional buying | The incoming invoices with quantity and date |
| The range of goods stays the same | seasonal menu, change of range, new products | The item master data across the period |
| Prices stay the same | price adjustments, promotions, lunch menu | The till's price-change history |
| The mark-up is the same across products | drinks and food carry very different mark-ups | The recipes and the sales statistics |
| There is no free consumption | staff meals, own consumption, wastage, breakage | The business records kept on this |
| The comparison period is representative | refurbishment, business holidays, exceptional events | The documented course of business |
The more effective route does not run through criticism
A time-series comparison is a plausibility test — a procedure that infers a result from a handful of quantities. Whoever merely criticises it stays inside its logic. Whoever instead submits the complete calculation makes it moot: under § 162 Abs. 1 Satz 1 AO estimation applies only in so far as the bases of taxation cannot be established or calculated. What has been calculated need not be tested for plausibility.
What we deliberately do not publish
How we build such a calculation in an individual case is not on this page. The point of attack on a method is public — it is in every relevant judgment. The way we calculate to replace it is not. Whoever needs the method will find it in our seminars; whoever needs the result will find it with us.
What we contribute
We record the complete goods input, store the actual recipes and recalculate the quantity produced and sold. Every figure leads back to a document, and every calculation step is documented so that a third party can follow it.
Measured against Europe’s strictest standard
Business-specific benchmark — this standard is not equally high everywhere. It is documented for 15 legal orders.
What is calculated is the business, with its own recipes, purchase prices and selling prices, not an industry average.
In our register this axis is recorded as exceeded in 15 of 15 documented legal orders. The assessment is ours and can be read country by country with its source — it is not a third party’s certification.
The legal provisions reproduced here are for information and do not replace legal advice. For application in an individual case the legal position at the time of the proceedings must be examined by a lawyer admitted in the country and field concerned.