General Terms of Assignment for Tax Consultants, Agents in Tax Matters and Tax Consulting Companies

The following "General Terms of Assignment" apply to contracts concluded by tax consultants, agents in tax matters and tax-consulting companies (hereinafter referred to as tax consultants) and their clients, unless some other explicit written agreement is reached or is compelled by law.

Our terms of delivery and payment apply exclusively. Our clients accept these upon award of contract, also for future business transactions, even if we do not refer to these explicitly, but they have been sent to the client in connection with an order confirmed by us. If an order is placed with us in deviation from our terms of delivery and payment, these terms of delivery and payment shall nevertheless apply, even if we raise no objection. Such deviation therefore applies only if explicitly accepted by us in writing.

1. Scope and Execution of the Order

(1)  The Scope of performance to be rendered by the tax consultant is determined by the order awarded.

(2)  The order is discharged in keeping with the principles of orderly professional practice.

(3)  The tax consultant will accept the facts as presented by the client, particularly as relating to figures, as correct. If the tax consultant discovers incorrect content, he is required to draw attention to this.

(4)  Checking the correctness, completeness and orderliness of the documents and figures submitted, and particularly of the bookkeeping and balance sheet only forms part of the order if this has been agreed to in writing.

(5)  The order does not constitute any power of attorney for representation to public authorities, courts or other such bodies. Such must be conferred separately. If, due to the absence of the client, clarification with the latter as to the utilization of legal assistance or legal measures is not possible, the tax consultant is both entitled and obliged, where necessary, to take measures to observe deadlines.

2. Obligation to Secrecy

(1)  The tax consultant is required by law to treat all facts made known to him, in connection with the execution of the order, confidentially, unless the client has released him from this obligation in writing. The obligation to secrecy continues to apply even after the ending of the contractual relationship.

(2)  Within the context of the order awarded, the tax consultant is entitled to record personal data relating to the client and the client's employees, and to process this in an automated file, or to pass it on to a computer service centre for further order-related data processing.

(3)  The obligation to secrecy also applies to the same extent to employees of the tax consultant.

(4)  The obligation to secrecy does not apply to instances in which disclosure is required in the justified interests of the tax consultant. He is also released from the obligation to secrecy in cases in which the insurance terms of his professional liability insurance require him to provide information and to cooperate.

(5)  Statutory rights to refuse to divulge information or to testify, in keeping with section § 102 of AO [Tax Code], section § 53 of StPO [Code of Criminal Procedure], and section § 383 of ZPO [Code of Civil Procedure] remain unaffected.

(6)  The tax consultant may only pass on reports, certifications and other written summaries of the results of his activities to third parties with the consent of the client. Furthermore, no obligation to secrecy applies if the undertaking of a certification audit in the tax consultant's office is necessary and the persons working there have, for their part, been instructed as to their obligation to secrecy. The client consents to the examination by the certified/auditor of his hand-written files – as kept and stored by the tax consultant.

3. Involvement of Third Parties

(1)  In executing the order the tax consultant is entitled to make use of the services of employees, competent third parties and data-processing companies.

(2)  In making use of competent third parties and data-processing companies the tax consultant must ensure that they undertake to maintain absolute discretion in keeping with no. 2, paragraph 1.

(3)  The tax consultant is entitled to appoint general representatives (section § 69 of StBerG [Tax Consultancy Law]) as well as office trustees (section § 71 of StBerG), in the event of their appointment, to inspect the reference files in the sense of section § 66, paragraph 2 of StBerG.

(4)  The tax consultant is entitled, in fulfilling his obligations in keeping with the German Data Protection Law, to appoint a representative for data protection. If the representative for data protection is not already subject to obligation to secrecy in keeping with no. 2, paragraph 3, the tax consultant must ensure that the representative for data protection, at the beginning of his or her appointment, undertakes to observe confidentiality with respect to data secrets.

4. Correction of Errors

(1)  The client has a right to correction of any errors or defects. The tax consultant must be given an opportunity to make subsequent improvements.

(2)  If the tax consultant fails to correct, within a reasonable period, any shortcomings objected to, or if he refuses to undertake such corrections, client shall be entitled to have the corrections undertaken, at the cost of the tax consultant, by another tax consultant, or else, at the clients choice, to demand a reduction of the sum payable or revocation of the contract.

(3)  Obvious faults (e.g. spelling mistakes or calculation errors) can be corrected by the tax consultant at any time via a third party. The tax consultant may also have other defects remedied by third parties subject to the approval of the client. The approval of the client is not necessary if there are justified interests of the tax consultant that take priority over those of the client.

5. Liability

(1)  The tax consultant is liable for his own faulty behaviour, as well as for that of his executing aides.

(2)  The client's claims against the tax consultant for compensation for damage of the sort referred to under paragraph 1, due to negligence, are limited to EUR 1,000,000,00. This limitation does not apply to damage claims arising from injury to life, limb or health.

(3)  If, in individual cases, particularly the level of liability is to be limited to a lower sum than that named in paragraph 2 (at least EUR 250,000), this requires a written agreement to be separately prepared and handed over to the client together with these General Terms of Assignment at the time of conclusion of contract.

(4)  If a claim for damages made by the client is not subject to a shorter statutory period of limitation, it shall expire

• after three years, as from the time at which the claim came into force and the client became aware of the circumstances on which the claim was based and the person of the debtor, or should have become aware if not for gross negligence.
• ignoring the aspect of awareness, or of unawareness due to gross negligence, after five years as from the time of coming into force.
• ignoring the aspects of coming into force and awareness, or unawareness due to gross negligence, after ten years as from the occurrence of the activity, the breach of duty or the other incident giving rise to the damage. The earlier deadline is applicable, if there are options.

(5)  The regulations contained in paragraphs 1 to 4 also apply to other persons than the client, where exceptionally, in individual cases, contractual or non-contractual relations also exist between the tax consultant and such persons.

6. Obligations of the Client

(1)  The client is obliged to cooperate, when such cooperation is required for proper discharging of the assignment. In particular, the client must provide the tax consultant, without having to be asked to do so, with all of the documents necessary for the undertaking of the assignment. These documents must be correct and the tax consultant must be given sufficient time in which to undertake the work. The same applies to the provision of information on all occurrences and circumstances that might be of relevance to the discharging of the assignment. The client is required take account of all written and verbal communications of the tax consultant and, in cases of doubt, to confer on the matter.

(2)  The client must refrain from all behaviour that might impair the independence of the tax consultant and his executing aides.

(3)  The client undertakes to pass on the results of the work of the tax consultant only with the written approval of the latter, if such approval is not already implicit in the contents of the assignment, with respect to specific third parties.

(4)  If the tax consultant employs data-processing programs on the client's premises, the client is obliged to comply with the directions of the tax consultant on installation and application of the programs. Furthermore, the client is both obliged and entitled to duplicate the programs only to the extent specified by the tax consultant. The client must not distribute the programs. The tax consultant remains the owner of the rights of use. The client must refrain from all measures that might conflict with the exercising of the rights of use by the tax consultant, with respect to the programs.

7. Failure to Cooperate and Delay in Acceptance on the Part of the Client

(1)  If the client fails to cooperate in terms of one of the requirements listed under no. 6, or other requirements, or if the client fails to accept services offered by the tax consultant in good time, the tax consultant is entitled to set an appropriate deadline, declaring in this connection, that he will decline to continue the contract after this deadline unless acceptance has been given. If the client fails to respond as required by the given deadline, the tax consultant is entitled to terminate the contract without notice (cf. no. 9, paragraph 3). The entitlement of the tax consultant to compensation for any additional costs incurred, or any damage suffered, due to the delay on the part of the client or to the client's refusal to cooperate remains unaffected. This also applies even if the tax consultant does not make use of his right of termination.

8. Assessment of Payment

(1)  Payment (fees and refunding of expenses) of the tax consultant for his work in keeping with section § 33 of StBerG [Scale of Fees for Tax Consultants] is determined on the basis of the scale of fees for tax consultants, agents in tax matters and tax consulting companies.

(2)  For activities that are not regulated by the scale of fees (e.g. section § 57, paragraph 3, nos. 2 and 3 of StBerG) the agreed payment is applicable, or otherwise the customary payment (section § 612, paragraph 2 and section § 632, paragraph 2 of BGB [German Civil Code]).

(3)  Offsetting against a payment entitlement of the tax consultant is only permissible in cases of claims that are uncontested or have been legally established. The enforcement of a right of retention by the buyer is excluded, unless it relates to the same contractual relationship or the counterclaims are uncontested or have been legally established.

9. Advance Payments

(1)  The tax consultant can demand an advance payment for charges already met and for anticipated charges and expenses.

(2)  If the requested advance payment is not made, the tax consultant, after announcing his intention in advance, can discontinue his efforts on behalf of the client until he has taken receipt of the advance payment. The tax consultant is obliged to notify the client in good time of his intention to discontinue his activities, if such discontinuation can give rise to disadvantages for the client.

10. Transfer of Receivables / Payments Due from the Client, with the Effect of Discharge of Debt

(1) We are entitled to assign entitlements arising from our business relationships.

(2) All payments, with effect of discharge of debt, are to be made solely to VR FACTOREM GmbH, Ludwig-Erhard-Strasse 30 - 34, D-65760 Eschborn, to which we have assigned our current and our future entitlements arising from our business relationships.

11. Default on Payment

(1)  If, with respect to us, the buyer defaults on payment, regardless of the payment obligation in question, all outstanding claims become due immediately.

12. Ending of the Contract

(1)  The contract ends upon fulfilment of the agreed services, upon expiry of the agreed period or upon termination. The contract does not end due to death, due to the inability of the client to conduct business transactions or, in the case of a company, due to its dissolution.

(2)  A contract concluded for an indefinite period of time can - if and to the extent that it represents a service contract in the sense of sections § 611 and § 675 of BGB [German Civil Code] – be terminated by each of the contracting partners in accordance with section § 620 ff of BGB; such termination of contract to be made in writing. To the extent that, in individual cases, some deviation from this procedure is desired, this must be agreed to in writing, the draft in question to be separately prepared and handed over to the client, together with these General Terms of Assignment, at the time of conclusion of contract.

(3)  In the event that the tax consultant terminates the contract, to help avoid any forfeiture of rights on the part of the client, those activities should be continued that are reasonable and for which deferment cannot be tolerated (e.g. an application for extension of a deadline that is in danger of expiring). For such activities too the tax consultant is liable in keeping with no. 5.

(4)  The tax consultant is obliged to hand over to the client everything he has received for purposes of executing the order and that has resulted from the business activities. Apart from this the tax consultant is obliged to give the client the necessary information, upon demand, as to the state of things and to account for this.

(5)  At the end of the contract the client must immediately return to the tax consultant the data-processing programs used in executing the order, including all copies made and other program documents, or must erase these from the hard disk.

(6)  After the ending of the client relationship the documents must be collected from the tax consultant.

13. Remuneration Entitlement in the Case of Premature Ending of the Contract

(1)  If the order is concluded before it has been fully completed, the tax consultant's entitlement to remuneration is determined according to the law. To the extent that, in individual cases, some deviation from this procedure is desired, this must be agreed to in writing, the draft in question to be separately prepared and handed over to the client, together with these General Terms of Assignment, at the time of conclusion of contract.

14. Safekeeping, Surrender and Right of Retention of Work Results and Documents

(1)  The tax consultant must keep the reference files for a period of seven years after the ending of the assignment. This obligation expires before the end of this period, however, if the tax consultant has requested of the client in writing that the client take receipt of the reference files and the client fails to do so within six months of receipt of this request.

(2)  The term reference files, in the sense of these regulations, applies to all papers and documents submitted to the tax consultant by the client in the context of the tax consultant's activities. This does not apply, however, to correspondence between the tax consultant and his client, or to papers and documents that the client has already been given in the original or in transcript, or to working papers prepared for internal purposes.

(3)  At the request of the client, and after the ending of the assignment at the latest, the tax consultant must submit the reference files to the client within a reasonable period. The tax consultant may make and retain copies or photocopies of documents returned by him to the client.

(4)  The tax consultant may refuse to issue his work results and the reference files until his fees and expenses have been met. This does not apply if in the circumstances, particularly due to the relative insignificance of the sums due, such retention would amount to a breach of trust. Until the correction of shortcomings objected to in good time by client, the latter is entitled to retain a reasonable part of the payment.

15. Applicable Law and Place of Performance

(1)  The assignment, its execution and the claims and entitlements arising therefrom are solely subject to German law, and in particular to the German Civil Code and the German Commercial Code.

(2)  The place of performance is the place at which the business premises are located or the place of counselling, if the client is a full trader.

(3)  The place of jurisdiction is the place at which the company is located, or Frankfurt am Main, at our choice.

16. Validity in Cases of Partial Invalidity

(1)  Should any of the provisions of these Terms of Assignment prove to be invalid, whether at present or at some later date, this will not affect the validity of the remaining provisions. The invalid provision is to be replaced by a valid one that most closely approached the targeted objective.

17. Amendments and Extensions

(1)  Alterations and extensions to these Terms of Assignment must be made in writing.