Court case 3 K 596/22 – Court Ruling (Germany, 2023)

The case concerns the legality of a request for documents. The controller was the owner of several apartments. The Bavarian tax authority required the controller to provide several documents, including their rental contracts. The controller submitted the rental contracts but redacted the names of the tenants. They explained that it was not possible to disclose personal data without consent. The names were also not necessary for an examination of their actual income. The tax office dismissed the objection and requested the landlord to submit the names of the tenants. The tax office stated that a tax payer is obliged pursuant to § 90 Section 1 of the Fiscal Code (Abgabenordnung - AO) to cooperate in determining the facts. This obligation to cooperate also includes the obligation to submit documents. The tax office needed the names of the tenants and the respective rental agreements to check the tax-relevant circumstances. As a matter of fact, tenants' name were required in order to assign payment flows to the respective tenancy individually. Therefore, the document request was appropriate and reasonable. The controller was entitled (and obliged) to name the tenants to fulfill their tax obligations in accordance with Article 6(1)(c) GDPR. The controller brought an action before the finance court. They took the view that the personal data of the tenants contained in the apartment rental contracts were protected by the GDPR. The landlord was therefore not allowed to disclose this data to third parties without the tenants' consent. The Nuremberg Financial Court dismissed the action. The tax office was allowed to request the documents at issue. The German legislator used the open clause of Article 6(1)(c) and (e) GDPR, in combination with Article 6(2) and Article 6(3) GDPR, to create a legal basis for the processing of personal data by tax authorities pursuant to § 29(b) AO. The processing of personal data by a tax authority is permitted if it is necessary to fulf