Introduction to Accounting in Germany

The German way of doing the accounts, can be different to what you know back home. This page wants to give you a guide in a nutshell.

Appeals in Taxation Matters

Paying taxes is something everyone "hates" but paying too much taxes is something even more worse. This page will give you some hints on what to do when you believe the assessment is wrong.

Corporate Tax

This page will introduce you to corporate taxation in Germany. In other words, you will find out who is subject to Körperschaftssteuer.

Operational Deductions

Tax law in Germany strictly distinguishes between operational expenses, "Betriebsausgaben", and special expenses, "Sonderausgaben". Some of these special or personal expenses are deductible in full and some only partially. For simplification reasons, the distinctions of the special expenses will not be extensively discussed here. Your tax attorney or tax adviser will professionally deal with this. The difference between both kinds of deduction is that only income-related expenses can create a negative result for taxation. Sonderausgaben do not create negative income. A typical example will be if you are laid off. You have no income but expenses for job applications. These application costs can give you negative income. Supposing you are doing your taxes yourself, then just claim all special deductions in full and let the tax office do the subtracting. This is a lean but mean approach – but legal.

Tax Return and Declaration Duties for Employers

Employers are not only to pay the salary but also have to take care of some tax and social security duties of their employees. Non-compliance can mean personal liability...

Flat Rate for Input Tax in Annual Statement

Any and all business persons that add VAT to their invoice know that they can deduct the VAT billed to them by other businesses – the so-called ”input tax“. But what if your turnover was high and your investments were low? You can use a little-known flat rate – pursuant to §23 UStG i.c.w. §§69, 70 UStDV. However, this relief applies only for businesses required to keep tax records and not balance sheets. If your turnover was less than € 61,356 in the previous year, you are eligible.

Formalities in Taxation for the Business Person

You will find the basic formalities for all taxes described further below.

Income Tax

Income tax is always the tax on income of a private person and never a company or corporation! This income can be from employment or from a business – this is not relevant.

Input Tax or Prepaid VAT or Input VAT

If you haven't heard about this tax, then you are not really in business. Input tax (Vorsteuer) is to your advantage –  believe it or not.

Formalities for Invoicing for Intracommunity Trade and Services

It might be that you do not have to add VAT to your invoices for any business inside the community but you have to meet a bunch of formalities! LG2G will describe you the formalities for billing intracommunity trade and services.