Financial statements in Germany

Business enterprises operated under German law are required to prepare and publish annual financial statements. This must be done pursuant to the German act on annual financial statements (part of the HGB – the Handelsgesetzbuch). To some extent, German annual financial statements resemble their Danish counterparts. However, in German financial statements it is not permitted to revalue assets. The financial statements are based on the prudence principle in order to protect creditors.

Business enterprises operating in Germany under foreign law must prepare tax accounts of the operations in Germany.

Subject to certain amendments, the assessment of the taxable income is based on the annual financial statements. Here, smaller businesses and asset management firms are allowed to submit so-called cash accounts. These include only income received and expenses incurred in the year under review.

We can retrieve data from common Danish accounting software programmes – and initiate automated payments which you then need to approve at the bank.

Also, it is usually no problem for us to handle accounting or reporting according to a particular plan or specific chart of accounts. We can offer to use your enterprise’s existing Danish chart of accounts.

We also take care of the electronic publication of your German enterprise’s annual report in Germany. If the enterprise has only one business site, there are no requirements on publication.

Major differences between German and Danish accounting policies

German accounting policies are based on the prudence principle. In Denmark, they are based on the principle of true and fair value. For this reason, fixed assets and inventories, in particular, are valued differently in Danish and German financial statements. The German commercial balance sheet differs from the tax accounts.

Tax depreciation charges are made over extended depreciation periods and based on fixed rates specified in an official table. A fiscal year cannot exceed 12 months. Only very few companies in Germany are required to have their accounts scrutinised by auditors.

 

Dipl. Kfm., Steuerberater
+49 461 700 35 42
Andreas Petersen
Dipl. Kfm., Steuerberater
+49 461 700 35 42
Dipl. Kfm., Steuerberater, Fachberater für internationales Steuerrecht, Partner
+49 461 700 35 0
Jan Meyer-Sievers
Dipl. Kfm., Steuerberater, Fachberater für internationales Steuerrecht, Partner
+49 461 700 35 0