International Tax Enforcement in Germany: Legal Assistance with Claims from the EU, the UK, and the USA

For a long time, cross-border tax enforcement was simply defeated by the absence of effective mechanisms: no agreement, no infrastructure, no means of access. Several developments have fundamentally changed this.

The first factor is the consolidation of relevant international agreements. Within the EU, Directive 2010/24/EU has created a uniform system allowing any member state to enforce tax claims across the entire EU area. At the global level, the OECD Convention on Mutual Administrative Assistance in Tax Matters, now ratified by more than 140 states, has established comparable structures for dealings with third countries.

The second factor is the digitalization of administrative communication. Mutual assistance requests that once took months to process are now transmitted through electronic interfaces. The Bundeszentralamt für Steuern (BZSt), the Federal Central Tax Office, receives these requests and coordinates their referral to the authorities responsible for enforcement.

The third factor is the increasing resolve with which foreign tax authorities actually deploy these instruments. Tax authorities are investing more in specialized units for cross-border recovery, and the automatic exchange of information under OECD standards provides the data they need for targeted enforcement measures abroad. What was once impractical has become routine.

For internationally active companies, this means that a tax assessment being challenged in another state, or whose validity is in doubt, may already be resulting in account attachments in Germany. Enforcement continues until an application for suspension is actively filed and granted. Inaction has consequences. Swift and legally sound action is essential in these situations.

The central framework for enforcement within the European Union is Directive 2010/24/EU (MARD — Mutual Assistance for the Recovery of Debts). Germany has implemented this Directive into national law through the EU Recovery Assistance Act (Gesetz zur Umsetzung der Beitreibungsrichtlinie sowie zur Änderung steuerlicher Vorschriften, EUBeitrG).

The EUBeitrG governs not only the procedure but also contains important protective provisions for enforcement debtors. Strict formal requirements apply to the recovery request: it must be accompanied by a standardized Uniform Instrument for Enforcement, issued in the requesting state and containing all material particulars of the claim. Under Section 9(1) EUBeitrG, this instrument constitutes an enforceable administrative act and is the sole basis for German enforcement measures. If the document is missing, materially deficient, or issued in the name of a different person, there is no formally valid enforcement title under German law.

The competence structure on the German side is two-tiered. The superior competent authority and central liaison office within the meaning of the Recovery Directive is the Federal Ministry of Finance (Bundesministerium der Finanzen, BMF) pursuant to Section 3(1) EUBeitrG. Operational review and processing of incoming requests falls to two subordinate liaison offices: the Bundeszentralamt für Steuern (BZSt) for tax matters, and the Bundesstelle Vollstreckung Zoll at the Hauptzollamt Hannover for customs matters. Following an admissibility review, the liaison offices refer the request to the competent enforcement authorities, which carry out the actual enforcement measures, including account attachments, claim attachments, and seizure of assets.

For states outside the EU, the OECD/Council of Europe Convention on Mutual Administrative Assistance in Tax Matters (Multilateral Convention on Mutual Administrative Assistance in Tax Matters) provides the governing legal framework. More than 140 states have ratified this Convention, including Germany, the USA, and the United Kingdom.

In addition to information exchange, the Convention covers concrete forms of recovery assistance. Germany is accordingly obliged to treat recovery requests from contracting states in essentially the same manner as its own domestic tax claims, subject to the important qualification that the claim must not be time-barred under German law and the enforcement procedure must not conflict with fundamental principles of German law (the public policy, or ordre public, reservation).

The BZSt acts as the interface between foreign tax authorities and the German tax administration. This centralization has practical significance: formal errors in a request that the BZSt overlooks and forwards may no longer be capable of independent challenge by the enforcement authorities further down the chain. This makes timely legal review all the more important.

The UK’s withdrawal from the EU brought the regular application of the MARD Directive to an end. However, Article 100 of the Withdrawal Agreement extended the application of the EUBeitrG to certain legacy cases: claims that fell due before December 31, 2020, or that arose from transactions predating that date, remained subject to the EU regime for five years. That transitional period expired on December 31, 2025.

Recovery requests from HMRC submitted from January 1, 2026 onward are therefore governed by new legal bases. The distinction by tax type is critical:

For value added tax (VAT), customs duties, and excise duties, the Trade and Cooperation Agreement (TCA) contains a dedicated protocol on recovery assistance between the United Kingdom and EU member states. These claims can continue to be enforced through the German enforcement apparatus.

For direct taxes, in particular income tax, capital gains tax, and corporation tax, the OECD/Council of Europe Convention on Mutual Administrative Assistance in Tax Matters provides the governing basis, supplemented by Article 28 of the 2010 Germany-UK Double Taxation Convention. Since both states acceded to the Convention as independent contracting parties, an effective enforcement route exists for direct taxes as well, though under different procedural rules than those applicable under the EUBeitrG.

For companies currently facing HMRC claims, the question of when the request was submitted and which tax type is involved is therefore not an academic one: it determines which protective instruments are available in the German proceedings.

Regardless of the applicable legal basis, the enforcement procedure in Germany follows the same course. HMRC submits a recovery request to the competent liaison office, which, following an admissibility review, refers it to the competent enforcement authority. For VAT claims this is a tax office (Finanzamt); for customs duties and excise duties it is a customs office (Hauptzollamt).

The enforcement authority then issues attachment and collection orders against the debtor’s accounts or claims, without any prior substantive review by a German court.

Substantive review of the tax claim remains reserved to the country of origin. German courts and authorities are not empowered to assess the material correctness of an HMRC assessment. This division of competence requires a two-pronged strategy: simultaneous challenge to the enforcement in Germany and to the underlying assessment in the UK. Where appeal or court proceedings are pending there, an entitlement to suspension of enforcement in Germany exists under the applicable legal regime.

The Uniform Instrument for Enforcement is the foundation of every cross-border enforcement action. It must be properly issued in the requesting state and contain all material particulars: the identity of the debtor, the nature and origin of the claim, the amount, interest and costs, and details confirming enforceability.

If the document is missing, contains material gaps, or was issued in the name of a different person, there is no formally valid enforcement title under Section 9(1) EUBeitrG. Such a formal defect can be raised by way of objection against the attachment order issued by the competent enforcement authority and will result in the enforcement measure being set aside.

Section 13(2) EUBeitrG provides that the enforcement authority shall suspend the enforcement proceedings in respect of the disputed portion of the claim if the requesting foreign authority has notified Germany that an appeal has been lodged against the claim. Suspension therefore does not occur automatically once appeal proceedings are pending abroad. It requires the requesting authority to give active notification.

A further limitation applies: under Section 13(3) EUBeitrG, the requesting authority may expressly request that enforcement continue notwithstanding the pending appeal. In that case, enforcement in Germany proceeds, and the requesting authority bears liability for any refund of amounts already recovered if the appeal is ultimately successful.

For the defense strategy, this means that simply lodging an appeal in the country of origin does not stop enforcement in Germany. Active case management is required on both fronts: in Germany and in the country of origin, to ensure that the conditions for suspension actually apply. Our tax litigation team handles proceedings before the German fiscal courts where domestic enforcement measures require challenge.

Section 14(2) EUBeitrG excludes mutual assistance where the original request was made in respect of claims that were already more than five years old at the time of submission, calculated from the date they fell due. Mutual assistance is absolutely excluded where the claim is more than ten years old at the time of the request. Both periods may shift: where an appeal has been lodged against the claim, the five-year period runs only from the point at which no further challenge is possible; where a payment deferral has been granted, it runs from the end of the deferral period. Limitation analysis is therefore not a formality and can, in individual cases, result in the complete defeat of the request.

A minimum threshold also applies: under Section 14(1) EUBeitrG, mutual assistance is inadmissible where the total claim is less than €1,500. This threshold is rarely relevant for corporate claims but may become significant in cases involving fragmented claims or following partial payments.

A final line of defense is the public policy reservation (ordre public). Where the foreign enforcement procedure conflicts in a material respect with the rule-of-law principles of German law, for example because the debtor was not afforded effective legal due process in the country of origin, or because the claim rests on a manifestly arbitrary assessment, enforcement in Germany can be resisted. The public policy reservation is subsidiary in nature and will only succeed in exceptional cases, but it provides an important legal safeguard in the most serious cases.

Where enforcement has already resulted in funds being seized before a suspension could be obtained, recovery of those amounts remains possible if an appeal in the country of origin is ultimately successful. Under Section 13(3) EUBeitrG, the requesting authority bears liability for reimbursement in such cases. Pursuing that reimbursement requires coordinated action in both jurisdictions and prompt legal instruction.

Cross-border tax enforcement requires a two-pronged approach. In Germany, the immediate effect of enforcement must be stayed and ongoing attachment measures challenged. In the country of origin, whether the UK, the USA, or another EU member state, the underlying tax assessment must be challenged simultaneously, since only its removal resolves the matter permanently.

Managing two parallel sets of proceedings in different legal systems requires close coordination. Deadlines for appeals in the country of origin must be met in order to support an application for suspension under Section 13 EUBeitrG. At the same time, objection deadlines against attachment orders in Germany must not be missed.

Dr. Matthias Wurm, LL.M. and Dr. Sepehr Moshiri work closely with qualified tax lawyers in the UK and the USA in cross-border tax enforcement matters. This cooperation is not a procedural formality but a strategic necessity: enforcement in Germany can only be permanently averted if the underlying assessment is successfully challenged in the country of origin. Both sets of proceedings must be aligned in their legal arguments and coordinated to preserve applicable deadlines.

Those most commonly affected are companies that have received an attachment order from a German enforcement authority without having been previously informed of the underlying foreign proceedings, a situation that arises more frequently in practice than might be expected. We also advise companies engaged in ongoing tax disputes abroad who wish to ensure that those proceedings do not escalate into parallel enforcement action in Germany. Our criminal tax law and voluntary disclosure services are available where enforcement intersects with tax criminal law proceedings.

Cross-border tax enforcement is an area where speed and legal precision are equally important. Once an attachment order has been served, appeal deadlines begin to run. At Schlun & Elseven, our tax lawyers review the legal position promptly and coordinate legal protection across both jurisdictions, without the delays that arise from coordinating between separate firms.