Accounting & Tax Compliance in Germany

How accounting and tax compliance work in Germany

Germany applies a federal tax framework — corporate income tax and VAT — combined with a municipal trade tax that varies by location, and statutory bookkeeping duties under the Commercial Code (HGB). Obligations scale with company size: reporting depth, disclosure format and audit requirements all depend on which of the four HGB size classes an entity falls into.

The sections below cover the figures a finance or operations lead needs before registering an entity or taking over an existing one: tax rates, VAT rules, bookkeeping standards, audit thresholds, filing deadlines and the e-invoicing mandate now being phased in.

Körperschaftsteuer and Gewerbesteuer

Corporate income tax (Körperschaftsteuer) is a flat 15%, plus a 5.5% solidarity surcharge on that amount — an effective federal rate of 15.825%. Municipal trade tax (Gewerbesteuer) is layered on top: a 3.5% base assessment rate multiplied by a municipal collection rate (Hebesatz) that typically runs 200%–900%, producing an effective trade tax of roughly 14–17% in major cities.

Rates and registration thresholds

Germany applies a 19% standard VAT rate and a 7% reduced rate on defined categories. Businesses established in Germany must register once prior-year turnover exceeds €25,000, or once current-year turnover is expected to exceed €100,000. Foreign companies with no German establishment have no minimum threshold and must register from their first taxable supply.

HGB, GoBD, and the SKR03 / SKR04 standard

Double-entry bookkeeping with a balance sheet and profit-and-loss statement is mandatory under §238 HGB. No specific chart of accounts is required by law, but SKR03 and SKR04 — both developed by DATEV — are the de facto national standard. Digital bookkeeping must be traceable under the GoBD principles: every posting requires a source document.

HGB size classes and when an audit is required

German commercial law (§267, §267a HGB) sorts corporations into four size classes by balance sheet total, revenue and average headcount — thresholds last updated April 2024. A company only changes class after exceeding or falling below two of the three criteria on two consecutive balance sheet dates. A statutory audit under §316 HGB becomes mandatory once an entity leaves the small class.

Filing deadlines and penalties

The Jahresabschluss is due within 12 months of the fiscal year-end and filed electronically via the Unternehmensregister (the filing point moved from direct Bundesanzeiger submission in August 2022; the Bundesanzeiger publisher still operates the platform). Micro-companies may deposit (Hinterlegung) rather than fully publish (Offenlegung) their balance sheet under §326(2) HGB.

The B2B rollout, 2025–2028

Germany's B2B e-invoicing mandate, introduced under the Growth Opportunities Act, phases in structured invoicing (EN 16931 formats such as XRechnung or ZUGFeRD 2.1+) between 2025 and 2028. Structured e-invoices must be archived in their original format for at least 8 years.

Bookkeeping implications by legal form

The choice of legal entity affects minimum capital, governance and — directly — the bookkeeping and disclosure regime a company sits under from day one.

Frequently asked questions