"Lindner could make a difference on taxes"

Melchior Neumann is co-founder of Kontist Steuerberatung and frustrated by the privileges enjoyed by the tax consultancy industry. In this interview, he takes a swipe at the industry - and hopes the finance minister will do the same.

With Kontist, Melchior Neumann wants to simplify taxes for the self-employed, but he says he's biting his teeth out at lobby associations, tax advisors and finance ministers. Too slow, too in love with the status quo, too sedate: the trained tax clerk knows many prejudices about his profession and says that the vast majority of them are true. In this interview, he talks about the discrimination against taxtech companies, why legaltech is so much further ahead and what he expects from Finance Minister Christian Lindner.

Mr. Neumann, everyone knows about fintech and legaltech. You want to do taxtech with Kontist, but somehow the sector isn't really taking off. What's going on?

I get asked this question all the time by friends and acquaintances. I can say relatively quickly what's going on: banks and lawyers are more innovative and open to digital solutions in their field. Many tax advisors still see digitalization and technology as a threat rather than an opportunity.

What do they attribute this to?

There are many things. Just one example: in the EU, freedom of services should actually apply by law. This means that French or Spanish tax consultants would be allowed to offer their services in Germany and suddenly there would be a lot of competition for clients. But the tax consultants are simply delaying the implementation of such freedom for all eternity - or at least until they retire.

Tax consultants want to keep the status quo until they retire, at least the older ones among them

Melchior Neumann, Kontist

Why do you think that is?

Tax consultants in Germany have a margin guaranteed by the state, guaranteed by the statutory remuneration ordinance. To put it very simply: if they need three hours to do something instead of just one hour, they earn more money. This remuneration is a huge pain. Tax consultants therefore want to keep the status quo until they retire, at least the older ones among them. When I talk to young colleagues, they are often overwhelmed by all the tasks that only they are allowed to do.

You're talking about the reserved tasks that only tax consultants are allowed to perform by law.

Exactly. This includes, for example, the fact that only they, as a service provider, are allowed to submit an advance VAT return or file a tax return, unless the entrepreneur does it themselves. When we do the advance VAT return as a tax app, we do everything automatically. But although we can do it, we are not allowed to fully automate it. So we interrupt our automation and press a button manually because only a tax advisor is allowed to do this task. That's a completely crazy system.

The tax consultants' lobby association won't like to hear that, but for crying out loud: throw out a few reserved tasks.

Melchior Neumann, Kontist

What do you propose?

The lobbying association for tax advisors won't like to hear this, but by golly: why don't you throw out a few reserved tasks? There's no point in tax advisors constantly complaining that they are overloaded with all these tasks and that they are the only ones allowed to do them. Even if I, as a tax clerk, knew what you need to do with your taxes, I wouldn't be allowed to tell you because I would then be working as a tax consultant. This would help you, help me and the tax consultant would have less work. Of course, the same applies to a fully automated solution. But that's not what the legislator wants.

Finance Minister Christian Lindner could make a difference when it comes to taxes.

Melchior Neumann, Kontist

Legislators fear that tax returns may be incorrect and who should then be liable?

To be honest, we would be happy to take on the risk. In 98 percent of all cases, there is no additional payment in tax audits anyway, and if there is, it is often not very high for the self-employed people we look after. Statistically speaking, they are audited every 90 to 100 years and have a low back payment. That's not a big liability risk, which we would be happy to bear. If we were allowed to, I would offer the service: Pay us X a month and we'll pay your tax arrears in the event of an audit. Unfortunately, this is not permitted by law.

Do you expect support from politicians for start-ups like Kontist in the current legislative period?

Finance Minister Christian Lindner could do a lot about taxes. I think he would also like people to remember him as a tax simplifier. But then the powerful association of tax consultants will be at the door again and say: we can't do it that way. They would never suggest something that could be done without tax advisors, even if it would be better for many people. I don't want to hold that against them, because that's what a lobbying association has to do. But it doesn't help us as a start-up or the people who spend hundreds of euros on a tax consultant who is totally overworked. We need to clean that up.

Personal details: Melchior Neumann is 33 years old and co-founder of Kontist Steuerberatung mbH in Berlin. After training as an assistant tax consultant, he worked for KPMG and subsequently advised companies such as felix1, Lexoffice, Debitoor and Klarna. Nine years ago, Melchior Neumann launched the steuerazubi.de portal.