Accountant in Germany

Updated on Thursday 08th August 2024

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Working with an accountant in Germany is required for many types of businesses, as annual reporting compliance is mandatory for all businesses, irrespective of their size or type.

Our accountants, recommended by the team at our law firm in Germany, provide a set of services that are indispensable for companies in all business fields. We offer our services throughout Germany and we work with both local and foreign companies that have opened branches or subsidiaries in the country.

Quick Facts
Bookkeeping services	Daily transactions recording, accounts receivable and accounts payable administration
Payroll in Germany	Employee payment and contributions management including submitting the necessary payments to the employees, social security payments and others
Invoicing	Preparing and issuing proforma and regular invoices to clients, tracking invoices and keeping records of overdue invoices
Cash management	Managing the cash payments as needed, bank reconciliation
Reporting	Our accountants in Germany assist companies in preparing and submitting the annual financial statements according to the current requirements
Financial analysis	Calculating different ratios to determine the company's profitability (including the turnover ration, solvency ratio, etc.)
Forensic accounting	Accounting services relevant in fraud or money laundering investigations, financial information analysis for legal proceedings
Tax compliance	Complete information about the taxes owed by the company, partnership or sole trader in Germany; tax payments and filing as needed
VAT compliance and reporting	VAT registration, applications for the special scheme for small businesses (if eligible), VAT return filing and payment, VAT refund applications
Audit offered by our accountant in Germany	Audit for companies that are subject to this requirement in Germany according to size and type (medium and large private companies, public companies)
Property financial matters	Real property tax calculation and information regarding real estate property tax requirements according to municipality
Statutory compliance in Germany	Assistance for compliance with the German commercial GAAP or IFRS
Tax authority assistance	Representation, when and as needed, in front of the German tax authorities (The Federal Central Tax Office, the Ministry of Finance)
Support for voluntary dissolution	Accounting assistance throughout the liquidation phase, assistance for settling the debts to the creditors
Services for foreign companies offered by our accountants in Germany	Data on the double taxation agreements signed by Germany, foreign company taxation principles, etc.
Deadline for filing corporate tax returns	Generally by 31st of July every year
VAT registration	Mandatory for all businesses/individuals selling taxable goods/services.
Fiscal year	Calendar year
Invoicing	Our accountants create, issue, and track invoices as part of our service.
Special accounting requirements for smaller companies (YES/NO)	YES
Confidentiality of accounting documents	Documents can only be disclosed in case of legal proceedings or in cases involving significant public interest.
Accounting services for sole proprietors (YES/NO)	YES
Record-keeping requirements	10 years
Tax representation for foreigners (YES/NO)	YES
Tax minimization strategies	We assist with various strategies to reduce your business's tax liability.
Corporate tax rate	15% base rate + 5.5% solidarity surcharge of the base rate + local trade tax (which varies by municipality)
Other taxes in Germany	- trade tax rate, - customs duties, - excise taxes, - social security contributions, - withholding taxes, etc.
Number of double taxation treaties	90 (approx.)
Why choose our accountants	- budget-friendly services, - personalized services, - expertise, - accuracy, - tax minimization strategies, etc.
Other services provided by our team	Our lawyers can help with company formation, divorce proceedings, debt collection, and trademark registration.

Accounting services in Germany

The main types of services offered by our team of accountants in Germany include the following:

Bookkeeping: keeping proper records of all the financial accounts by using an accounting software;
Tax accounting: the thorough management of all of the taxes that are payable by the business;
Financial statements: drawing up the mandatory annual financial statements, such as the cash flow statement or the balance sheet;
Payroll: handling the financial records of the employee’s salary, deductions or bonuses.

Other services can also include those that are related to accounts payable (bill organization and payment processing) as well as accounts receivable (for ensuring the fast processing of invoices).

The services offered by our accountants in the country also relate to VAT registration in Germany. This is an additional registration, but it does not apply to all businesses. Depending on the size, and the annual turnover, your company may be exempt from this tax, as well as exempt from registration. You can reach out to us to find out if your business can opt for a special VAT scheme for small businesses.

Companies will generally choose to outsource these services and entrust a team of experts, such as our accountants in Germany, while they handle the actual business activities. By working with a qualified team, investors can rest assured that their financial statements are prepared according to law and that the business maintains the mandatory level of transparency when it comes to its activities.

Our team of lawyers in Germany can provide adequate legal counseling on the laws that govern the accounting principles applicable in the country, should investors require more details on this.

Our tax attorneys can also offer assistance on certain tax minimization strategies that can be suitable for the business, as well as the available sector-specific incentives, if applicable.

We are at your service if you want to open a bank account in Germany.

General accounting requirements for German companies

Companies in Germany are required to comply with certain tax, accounting and reporting procedures. The annual accounts are prepared in accordance with the German GAAP and the International Financial Reporting Standards are also used in certain cases. Our team of lawyers in Germany lists some of the main issues to take into consideration below:

Corporate taxation: the effective corporate income tax rate in Germany is between 30 and 33% and it includes a solidarity surcharge;
Tax year: this has a maximum period of 12 months and in some cases it can be shorter;
Tax returns: are filed electronically in most cases before the 31 July the year following the one for which the assessment is made;
Quarterly tax payments: these advance corporate tax payments are handled in March, June, September and December;
Penalties: can be imposed for late filing or for the late payment of the taxes that were assessed.

The work of an accountant in Germany is important in this context as he can make sure that the company complies with the filing and payment requirements and that it avoids the possible penalties.

The tax experts at our law firm in Germany recommend working with a certified accountant and auditor.

Accountants in Germany

The Public Accountant Act and its amendments regulate the accountant profession in Germany. This sets fort the professional duties as well as the establishment of the Chamber of Public Accountants. For those interested in the specifics of this Act, our team of attorneys in Germany can provide more details.

An accountant in Germany needs to be licensed and in order for this to be possible, he or she will need to complete a university degree and course that encompasses the disciplines that are subject to the Examination Regulation. A future accountant or auditor is then required to complete three years of practical experience, and at least two years in audit practice. Once this stage is finished, they are subject to subsequent examinations and after this, they receive a certificate issued by the Chamber.

According to statistics released by the Chamber of Public Accountants, there were 14,568 auditors at the beginning of the year. Other statistics for the beginning of 2020 reveal the following:

there were 2,377 sworn accountants
2,982 were auditing societies
most of the sworn accountants registered with the Chamber have a University business degree, 910 individuals.

As far as auditors are concerned, just as an accountant in Germany, they are subject to independent oversight from the Auditor Oversight Body, observing the Auditor Oversight Reform Act.

The German Commercial Code is the one to set forth the general rules for auditing, allowing for exemptions from audit to be in place only for certain small companies.

The German professional accountancy organization is the one to implement the country’s specific auditing standards, based on the German Generally Accepted Standards on Auditing (GAAS).

Accountants in Germany provide much needed services for companies of all sizes and across all business fields, and, while doing so, they observe a code of ethics for their profession.

The general professional duties of an accountant, as outlined in the Public Accountant Act and its subsequent amendments, include the following:

act responsibly, independently and in good conscience;
have a proper professional conduct;
prevent conflicting interests;
not offer assistance in unauthorized tax matters.

Members of the Professional Charter are required to submit annual quality assurance reviews if they will engage in statutory audits.

An accountant in Germany will also properly maintain the files as part of the special professional duties and deal with the court and public authorities as needed. The special professional duties are in place in order to ensure the quality of the work.

Germany applies the IFRS standards

It is important to know that the legal system related to accounting in Germany has made significant changes to comply with the system provided by the International Accounting Standards Board (IFRS).

There are several important differences between the IFRS and the German GAAP, in the sense that the historical costs represent the basis of accounting for both systems, but the IFRS allows the revaluation of the intangible assets and properties, while the German GAAP does not permit revaluation. However, the German GAAP provides an exemption, applicable to financial institutions.

Companies can apply other methods than the ones provided by the IFRS if the entities perform the compliance as prescribed by the law. The German GAAP specifies that if the financial statements do not present a true image of the business, the representatives of the company will have to disclose other documents as well.

As far as what is included in the financial statements, the following differences apply between the IFRS and the revised German GAAP:

IFRS: it includes the complete financial statements of the company (financial position, comprehensive income, cash flow, changes in income, changes in equity);
German GAAP: includes the single entities, the financial statements do not need to include the cash flow statement and the changes in equity statement; the German rules allow public companies to include segment reporting in their individual financial statements; additional statements can include a management report.

For the German GAAP, the balance sheet is prepared as to include the items in their increasing order of liquidity. Companies are required to use a certain format for the balance sheet and banks and other financial institutions are subject to additional requirements.

Companies following the German GAAP present their fixed and current assets separately, with the current assets being the ones that are not used long-term in the business.

Our accountant in Germany can give you more details about how the balance sheet (the company’s statement of financial position) is prepared.

In 2015, the European Commission offered a report on the implementation of the Regulation 1606/2002 (referred to as the International Accounting Standards Regulation), which has the purpose of creating a more transparent system related to the financial documents of a company, which will further provide more efficiency within the European Union’s single market.

The results on the study provided that the use of the IFRS offers many benefits to European companies, mostly referring to the compatibility of the financial statements of a company; our legal representatives can offer more details on the main advantages of using the IFRS.

The German GAAP

The German accounting standards are regulated by the Accounting Standards Committee of Germany, which provides the legal framework and recommendations on the way in which accounting procedures should be carried out in Germany.

The local accounting system, the German Generally Accepted Accounting Principles (GAAP), provides the way in which the bookkeeping activities of a company should be performed; the legal system is rather flexible and it had changed over time. However, the German GAAP prescribes that only financial gains will be recognized as profits.

Referring to the way in which the financial statements are handled, both the IFRS and the German GAAP prescribe similar procedures.

Financial statements should contain the following:

• the statement of the financial position;

• the statement of the of cash flows and equity;

• the statement of the income.

The responsibilities of a forensic accountant in Germany

The forensic accountant in Germany has to analyse the company’s documents and to interpret the results in accordance with the provisions of the applicable law. Further on, he or she must be able to present the results to the management of the company and, if necessary, in front of a German court.

The main responsibilities of a German forensic accountant are:

investigate the available documents and financial evidence;
create electronic presentations which will be used to present the evidence in a clear manner;
write reports on the financial results;
participate as an expert witness in a court hearing.

The forensic accountancy procedures in Germany can be useful not only to offer the real image of the financial situation of a company, but also to assist businessmen to recover their assets or to protect the company’s property and our German law firm can provide legal assistance in such matters.

Investors who are involved in debt recovery in Germany may need to perform forensic accountancy and in this case it is advisable to request the help of German lawyers.

Forensic accountancy in litigation cases presented by our German law firm

Forensic accountancy can be useful for litigation cases in Germany. In the situation in which a foreign investor is involved in this type of legal matter, the procedures carried out under forensic accountancy may help the respective business in refuting or sustaining a claim.

Some situations in which the work of a forensic accountant in Germany may be useful include shareholder or partner disputes, breach of contract, lost profits/damage calculation, criminal investigations (white-collar crime), fiduciary duty breach and more.

The role of a forensic accountant in business disputes/litigation is essential for an expert testimony, a stage on which the case can be built in such as manner that it will allow for a favorable outcome.

The forensic accountant will have the task of analyzing the available date, discover or trade assets, calculate the damages and establish the underlying fraud and how extensive this is.

A forensic accountant in Germany can assist the lawyers during the discovery phase of the trial, even before the commencement of the litigation proceedings. In this case, the accountant will provide the lawyers with an expert evaluation and key findings.

Compared to an accountant with no experience in litigation, the forensic accountant will have the needed experience to testify in court.

Foreign investors interested in the accounting procedures applicable in Germany can receive assistance from our team of German accountants.

Please reach out to our law firm in Germany for more information about the accounting and auditing services we provide for businesses.