TaxTech Weekly: DATEV shuts down DIY tax app KLARTAX

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DATEV shuts down DIY tax app KLARTAX

We're sure that every faithful reader of this much-loved newsletter has felt the rumblings of the German DIY tax market over the past few days. If not, we're here to bring you up to speed:

The leading German accounting and tax software solution for tax advisors, DATEV eG (Abre numa nova janela), has announced that it will end its KLARTAX (Abre numa nova janela) B2C efforts in the German private tax return market at the end of 2025.

Launched in 2020, KLARTAX was DATEV's ambitious first attempt to enter the consumer market in Germany. Specifically, KLARTAX was a (web) application for consumers to do their own personal tax returns in Germany, similar to well-known DIY solutions such as smartsteuer GmbH (Abre numa nova janela), Taxfix (Abre numa nova janela) and WISO Steuer (Abre numa nova janela).

What DATEV thinks

According to DATEV magazine (Abre numa nova janela), one of the initial reasons for this effort was to prevent other platforms from interfering between consumers and – DATEV's core market – tax advisors. Another reason was not to lose the market for simple private tax returns.

For these reasons, KLARTAX was part of DATEV's general "tax platform strategy". Other projects in this strategy include DATEV SmartExperts, a search for tax advisors, and DATEV Meine Steuern, a service for clients to provide their tax advisors with tax-relevant information and documents in digital form.

But DATEV is rethinking this initial approach. The reasons have changed. Knowledge from KLARTAX has found its way into SmartExperts / Meine Steuern, so DATEV no longer sees any value in maintaining KLARTAX and is shutting it down.

In concrete terms, this means that new registrations will no longer be accepted. New tax years, such as the upcoming tax year 2024, will no longer be supported – at least if you actually want to file a tax return. All data will be deleted at the end of next year.

A look at the market

DATEV's withdrawal from the German DIY tax filing market sends mixed signals to competitors. It shows that establishing such a product is not only about the core tax functionality and the sense of security it provides – both of which DATEV arguably excels in. While these are important fundamentals, there are other relevant issues such as ease of use and reaching customers through modern marketing efforts.

In such a crowded market, with the aforementioned big players and newcomers such as CHECK24 Vergleichsportal (Abre numa nova janela)'s SteuerCHECK and Taxefy® (Abre numa nova janela), it is clearly not easy to gain an edge over the competition – even with the heft that DATEV brings to the table.

It also raises the question of how many players are really needed and how many can actually survive, given that Taxfix acquired Steuerbot (Abre numa nova janela) last year, CHECK24 is offering its DIY tax tool for free and the German government is constantly stepping up its efforts to simplify the tax system (Abre numa nova janela) – making the problems these modern solutions are trying to solve smaller.

What to make of it

In the end, it may have been the right decision for DATEV to abandon its ambitious KLARTAX project, learn the lessons, focus on what it has and build on that. But having tried to conquer the DIY market with KLARTAX, DATEV should be careful not to let the DIY competition encroach too much on its own B2B market by letting them move unhindered from easy-to-use applications for individuals to easy-to-use tax software for tax advisors. It's a move that won't happen overnight, but it's well underway with Taxfix's expert service (Abre numa nova janela) or Kontist by Ageras (Abre numa nova janela)'s early attempt at a scalable tax service for the self-employed.

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