More competition on the tax advisory software market in future

The German tax adviser chambers have undertaken towards the Bundeskartellamt to facilitate the electronic legitimation of tax advisers via different databases. Once the tax authorities have adjusted their IT systems, the chambers will support a parallel operation of legitimation solutions for tax advisers to choose from. Up until now the tax adviser chambers have exclusively commissioned the company Datev eG with the operation of an electronic database for the administration of mandates. For this reason the Bundeskartellamt conducted a cartel and abuse proceeding against the chambers. The tax adviser chambers’ binding commitments were sufficient to eliminate the authority’s competition concerns and the proceeding could be terminated by mutual consent.

The chambers’ mandate database facilitates electronic tax returns via tax advisers and serves them to electronically legitimise themselves towards the tax authorities to access their clients’ data. Data access and electronic data processing then take place in the corresponding tax advisory software. Datev used to be the only company commissioned by the chambers to operate the mandate database, which resulted in a considerable competitive advantage for Datev, as it was the only company able to offer the database and software from a single source. Datev is currently by far the leading provider of software solutions for tax advisory firms.

For the transitional period the tax adviser chambers will operate the database themselves to ensure that Datev no longer has an advantage over other software providers. As soon as the tax authorities’ interfaces have been adjusted to facilitate parallel communication of their systems with several databases, the chambers will give software providers access to the professional registers they keep. All software providers will thus be able to synchronise data with the registers and develop their own legitimation solutions in a competitive environment.

Andreas Mundt, President of the Bundeskartellamt: “Administrative processes are increasingly digitised and often require bespoke IT solutions and systems. For users of such IT systems it is important to be able to select the solution best suited to their needs from a range of different competing providers. Professional organisations have to give potential providers of software products access to the required data while observing the legal framework conditions to facilitate the development of marketable products. With open interfaces, public administration supports the competitive development of suitable solutions.”

The proceeding was closely coordinated with the tax authorities, the Federal Ministry of Finance and providers of tax advisory software, including Datev. The Bundeskartellamt made the commitments offered by the tax advisory chambers and the Bundessteuerberaterkammer (Federal Chamber of Tax Advisers) binding by formal decision. The decision is not yet final and can be appealed at the Düsseldorf Higher Regional Court.
Further information is available (in German only) in a case summary on our website.