A. Introduction
On January 1, 2002 new legislation became effective that significantly enhances the rights of the German tax authorities to retrieve electronic data in tax audits. The new regulations are sometimes dubbed "EAudit". The most important changes are incorporated in sections 146 para. 5, 147 paras. 2, 5 and 6 and 200 para. 1 Abgabenordnung or Tax Procedures Act ("TPA"). The Federal Ministry of Finance issued guidelines on July 16, 2001 that represent the tax administration’s views on the new regulations. Simultaneously sec. 14 para. 4 Value Added Tax ("VAT") Act has also been amended. Under sec. 14 para. 4 VAT Act an electronic settlement that fulfils the requirement of a sophisticated electronic signature can be accepted as an invoice.
