Tax field audit

The 30/70 calculation

One euro of error becomes 3.33 euros.

A method that infers the whole business from one part of it. In hospitality the audit frequently calculates the beverages alone — the goods input there is manageable and the allocation unambiguous — and transfers the result to the food side through an assumed ratio of roughly 30 to 70. The arithmetic leverage is considerable: overstating beverage turnover by one euro raises total turnover by 3.33 euros. Every error on the narrow side acts on the broad side by a factor of 2.33.

Why the leverage is the real problem

In a full calculation an error acts where it arises. In an inference by ratio it acts everywhere. That does not make the accuracy of the beverage calculation more important than usual — it makes it three times as important. And it moves the dispute: it is not the food side that needs examining, it is the beverage side and the ratio.

The assumptions and how to test them

Assumption of the methodWhere it can breakWhat shows it
The 30 to 70 ratio applies to this businessRestaurant, bar, takeaway, catering, delivery — each type has its own ratioThe sales statistics of the business over the period
The ratio stays constant across the periodChanges of menu and concept, lunch trade, season, refurbishmentThe item master data and the price history
Beverage input translates fully into beverage turnoverBeverages used in dishes, staff drinks, breakage, shrinkage, complimentary drinks, vouchersThe operational records kept for this
Portion sizes match the standardHouse measures, carafes, jugs, happy-hour quantitiesThe recipes and the pouring practice
Food carries a comparable mark-upFood and beverages carry very different mark-upsThe calculation for each product
The takeaway share is negligibleDelivery and collection shift the ratio considerablyThe revenue accounts by tax rate

The more effective route does not run through criticism

The 30/70 calculation is a Verprobung — a plausibility test that infers a result from a few variables. Criticising it means staying inside its logic. Presenting 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 does not need to be tested for plausibility. And § 162 Abs. 1 Satz 2 AO requires all material circumstances to be taken into account — a ratio drawn from other businesses does precisely not take the circumstances of this one into account.

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 in a method is public — it follows from the assumptions of the method itself. The calculation with which we replace it is not. Those who need the method will find it in our seminars; those who need the result will find it with us.

What we contribute

We record the complete goods input for the audit period — beverages and food — store the recipe for every product and recalculate the quantity actually produced and sold. That removes the need for a ratio: both sides are calculated, neither is estimated.

Which figures make a business stand out

How the circle closes against stock control

The legal provisions cited here are given for information and do not replace legal advice.

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