What does a tax audit examine in the hospitality trade?
An external audit serves to establish the taxpayer's tax position (§ 194 Abs. 1 Satz 1 AO, German Fiscal Code) and is admissible at any commercial business (§ 193 Abs. 1 AO). In hospitality almost always the same question stands at the centre: whether the declared revenue fits the goods purchased. Unlike in many trades, revenue here can be derived from purchasing — through recipes, portion sizes and selling prices.
Why hospitality in particular
Two properties make the trade a focal point: a high share of cash business and a flow of goods that can be recalculated. Together they mean the authority has a comparison figure. But that is equally the business's opportunity — because the same calculation can be carried out in full and with the actual recipes instead of average values.
Scope and limits of the audit
The provisions in this table are German law. Most European legal orders know the same principle — set out verbatim and by country in the register of legal bases.
| Point | Legal basis | What applies |
|---|---|---|
| Admissibility | § 193 Abs. 1 AO | Admissible at any commercial business — no particular occasion is required. |
| Scope | § 194 Abs. 1 Satz 2 AO | May cover several taxes and periods or be confined to particular matters. |
| Cooperation | § 200 Abs. 1 Satz 1 AO | Provide information and produce records, books and business papers for inspection and examination. |
| Data access | § 147 Abs. 6 Satz 1 AO | Inspection of stored data, machine analysis or transfer as specified by the tax authority. |
| Till system | § 146a Abs. 1 Sätze 1 und 2 AO | Every business transaction individually, completely, correctly, in good time and in order, protected by a certified technical security device. |
| The principle | § 158 Abs. 1 AO | Proper accounts shall be taken as the basis of taxation. |
| Favourable circumstances too | § 88 Abs. 1 Satz 2 AO | The authority must take into account circumstances favourable to the parties as well. |
Goods input is both: the attack and the defence
When an audit infers revenue from purchasing, it works with assumptions — about recipes, portions, wastage, own consumption and staff meals. Each of those assumptions is an assertion of fact, and each can be replaced by the actual conditions of the business. Whoever stores their own recipes and calculates through the complete purchasing replaces the assumption with the document.
What experience shows decides the course
Not the argument over individual findings, but the timing. Whoever starts preparing their figures only after the closing meeting is arguing against a report that is already written. Whoever submits their own calculation during the audit is arguing into the proceedings.
What we contribute
We record the complete goods input of the audit period, store the recipe for every product and carry the proof from purchase through production to sale. Every figure leads back to a document. We work in German, Austrian, Italian and Swiss till technology.
Measured against Europe’s strictest standard
Completeness of the data basis — this standard is not equally high everywhere. It is at its strictest where it reads: The Director may use audit findings obtained for the taxation of ANOTHER year for the year under assessment — where no returns were filed, no books or records kept, or where he considers the returns incomplete or inaccurate (Gesetz 4/1978, Abs. 4, Cyprus).
What is recorded is the complete audit period, not a sample — and that is precisely what a simplification attaches to.
In our register this axis is recorded as exceeded in 25 of 25 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.