What do tax consultants actually do?

Published on 10.01.2019 from Anke Telle

counselor

The areas of work of a tax consultant are more varied than the job title suggests: in addition to classic support in tax law, tax consultants can also advise you on business matters and even represent you in court and at the tax office in tax matters. For most private individuals, the most common request to a tax consultant will be the preparation of a tax return, but for entrepreneurs they also offer to prepare personnel accounting or draw up annual financial statements or income and expenditure accounts.

What work can a tax advisor do for me? In which subjects are tax advisors trained, and in which activities do they apply advanced knowledge of business administration and accounting? This article gives you an overview of the field of work of a tax advisor.

What does a tax advisor do?

If you are wondering whether you can discuss a specific matter with a tax advisor, this leads to the question of what a tax advisor can and is allowed to do. The job title of tax advisor simply implies an advisory function on tax matters, but at first glance it is not clear what this entails. In addition, tax advisors usually have far more professional skills that go beyond tax law, particularly in the area of business administration.

Definition of tax advice in the legal text

The professional title of tax advisor is protected by the Tax Advisory Act : not everyone is allowed to offer tax advice commercially; only tax advisors, tax agents, lawyers, auditors and accountants as well as associations of these professional groups such as tax advisory firms are authorized to do so.

Reserved duties of a tax advisor

Section 1 of the Tax Advisory Act specifies what exactly is included in the "assistance in tax matters" offered by tax advisors. The matters can concern German or European law on taxes and duties, but generally everything that is administered by federal or state tax authorities. This tax advice in the true sense of the word contains the core tasks of a tax advisor; they are considered reserved tasks, which means that they may only be carried out by tax advisors, authorized representatives, etc.

Other areas of tax consulting

This field of work is supplemented by three other areas, which are not part of the reserved tasks: Tax consultants also help you with criminal proceedings and administrative offenses that affect taxes. Tax consultants can also act in insolvency proceedings and represent creditors. And finally, complete bookkeeping and the preparation of business financial statements are also tax matters that a tax consultant can take on for you. However, you can also have this type of work carried out by business economists and do not need to hire a tax consultant specifically for this.

How do you become a tax advisor?

To get a better idea of the qualifications that every candidate must demonstrate in an examination in order to be admitted as a tax advisor, it is worth taking a look at Section 37: Examination areas are tax procedural law, taxes on income, profits, inheritance and property taxes, consumption and traffic taxes, customs and commercial law, basics of civil law, European law and insolvency law, economics, business administration and accounting, and professional law. The scope of this list already makes it clear how diverse the profession of tax advisor is. In addition to passing the tax advisor examination, appropriate training is also required in order to be admitted to the examination. Either a four-year degree course followed by three years of practical work, or training in a related field with many years of professional experience.

Job description of a tax advisor

While the question “What does a tax advisor do?” can be answered by dividing his responsibilities into different specialist areas such as income tax law, sales tax law or personnel accounting, when considering “How does a tax advisor work?” his activities can be roughly divided into three categories: declaration advice, structuring advice and enforcement advice.

Preparation of declarations, applications and financial statements

Declaration advice includes the formal listing and presentation of your finances for the current or previous year. This includes, for example, preparing a tax return and bookkeeping, including the preparation of annual financial statements, income statements and balance sheets. In these tasks, the scope of action of a tax advisor is relatively limited, but it is extremely important that all formal requirements are met. Tax advice here has more of a function of assistance in a specific matter that the state requires of the client, such as preparing a tax return.

Advice for future tax planning

Structuring advice can possibly be seen as the most creative area of work for a tax advisor: this is where his advice is sought on how you should best structure your future financial planning in order to keep your tax burden low. This type of advisory work is particularly important for entrepreneurs, while as a private individual you are probably less likely to be confronted with major issues.

Tax advisors represent you in court and in tax office

And finally, enforcement advice is also one of the tasks of a tax advisor. You can have your tax advisor represent you before the tax office and also the tax court. For example, your tax advisor will submit your tax return directly to the tax office if you have authorized him to do so.

Here you can find the right tax advisor...

Sources