Germany Unveils Action Plan Signaling VAT Reporting System and Extended Archiving Rules

Germany’s Federal Ministry of Finance and Federal Ministry of Justice have jointly presented an action plan targeting tax and financial crime. Published on July 16, 2026, the plan outlines a broad package of measures to strengthen enforcement bodies, improve data analysis, and increase the risk of detection for offenders. Among these measures are several directly relevant to businesses’ VAT reporting obligations and the archiving of tax-relevant documents.

A New VAT Reporting System

The action plan announces the introduction of a VAT reporting system ("Umsatzsteuermeldesystem") designed to more effectively prevent VAT fraud. No technical details, scope, or implementation timeline have been disclosed at this stage. However, the direction taken appears to align with the near real-time, invoice-level reporting models that other EU Member States have already begun layering on top of their e-invoicing mandates. This suggests that Germany’s ongoing B2B e-invoicing rollout could ultimately serve as the technical foundation for a similar reporting mechanism.

Extended Retention Period for Accounting Documents

The plan also proposes extending the retention period for accounting documents from the current 10 to 15 years, aiming to better preserve crucial evidence for fraud investigations. For now, it is unclear whether this extended period would apply uniformly to all categories of records currently covered under the GoBD retention rules, or only to a defined subset considered particularly relevant to fraud investigations. The proposal also does not specify whether the extension would apply only to records created after the change takes effect, or retroactively to documents already within their current 10-year retention window.

Data Localization Through Mirror Servers

A further measure would require companies to store tax-relevant data on mirror servers located within Germany, effectively introducing a data localization requirement. As with the retention period extension, the practical mechanics have not yet been defined. It remains unclear whether the mirror server is intended to be a live, continuously synchronized copy of the data or simply a complete duplicate updated periodically, and which categories of data would fall within the requirement’s scope.

Status of the Measures

All three measures – the VAT reporting system, the extended retention period, and the mirror server requirement – are announced at the policy-plan stage only. None has yet been translated into draft legislation, and further detail is expected as the initiatives progress.

There’s more you should know about e-invoicing in Germany – learn more about the new and upcoming regulations.