Accountant in Germany

Updated on Tuesday 21st September 2021

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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.

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).

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 21 July the tear 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.

Accountants in Germany provide much needed services for companies of all sizes and across all business fields.

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 provies 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 specifiy 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.

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.

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.

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.