🇩🇪Germany

Unvollständige Carry-Dokumentation bei Betriebsprüfung – Bußgelder und Verzögerungen

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Definition

Betriebsprüfungen on German VC/PE funds have intensified since 2020 (BFH jurisprudence clarification). Auditors now demand: (1) Original carry agreements (signed PDF + witness records). (2) Timestamped waterfall calculations showing capital recovery per year. (3) Proof of LP return calculations (hurdle rate benchmarks). (4) Email chains documenting carry modifications or waivers. Reality: Funds store documents in paper folders, shared drives (no version control), or lost email archives. Missing file = Auditor presumes full carry as taxable service fee. Example: Fund 'Y' loses original carry agreement signed in 2015. Auditor assumes 10 years of carry (20% of profits) taxed as full employment income (42% rate) rather than 40%-exempt capital allocation. Back-tax bill: €500K. Plus § 162 AO penalty for missing documentation: €50K–€100K. Plus Strafzinsen (0.5%/month for 10 years = ~€300K). Total damage: €850K–€900K.

Key Findings

  • Financial Impact: €50,000–€500,000 per audit cycle. Components: (a) § 162 AO fine for document non-production: €5,000–€100,000+. (b) Back-tax assessment (higher liability due to missing proof): €100,000–€1,000,000+. (c) Strafzinsen (0.5%/month): €50,000–€500,000 (depending on assessment size and years).
  • Frequency: Betriebsprüfungen every 5–10 years; 60%+ of audited funds report document-related friction (estimated from audit service provider surveys).
  • Root Cause: No digital document management system for carry agreements; no timestamping/hashing of signed documents; carry agreement changes not logged; fund accounting system not linked to carry archive.

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Venture Capital and Private Equity Principals.

Affected Stakeholders

Fund Administrator (Fondsverwaltung), Compliance Officer, Tax Advisor (defending in audit), CFO/Fund Accountant

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

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