German Tax Retention Period for Receipts and Invoices: Duration Specified
In a recent development, the document retention periods for companies, self-employed individuals, and landlords in Germany have seen some changes. Here's a breakdown of the revised regulations and their implications.
According to the Fourth Bureaucracy Reduction Act, **companies** in Germany are now required to retain invoices and tax-related documents for a period of **10 years**, as mandated by the German Fiscal Code (Abgabenordnung, AO). This period starts from the end of the calendar year in which the document was created. Both paper and electronic documents fall under this obligation, and once the retention period expires, they can be deleted.
Similarly, **self-employed individuals** are expected to retain tax-relevant documents and invoices for the same duration of **10 years**. Some less critical documents might have shorter retention periods, but tax and accounting records generally require a 10-year retention.
For **landlords**, specific retention periods for tenancy-related documents are not explicitly outlined, but they must comply with general legal obligations for document retention, especially related to tax and rental agreements. Important documents such as rental contracts, tax documents, and proof of income should be kept for **at least 10 years** to comply with tax and legal requirements.
These groups must ensure **secure and accessible archiving of documents** for the entire retention period (usually 10 years for tax documents and invoices). This retention is mandatory and legally enforced; failure to comply can result in penalties or difficulties during tax audits or legal disputes. Companies and individuals must also be prepared to provide **machine-readable and immediately accessible data** if requested by tax authorities.
Private individuals can take advantage of tax deductions on certain expenses. For instance, they can deduct 20% of labour costs for household-related services (up to €4,000) and 20% for handyman services (up to €1,200) from their tax bill. If claiming these deductions, private individuals should keep all invoices and proof of payment for at least two years.
It's also advisable for private individuals, especially for warranties or guarantees which last for two years in Germany, to keep receipts and invoices. The German tax authorities are given significant powers and resources to combat financial fraud.
In summary, the **10-year retention period for invoices and tax documents** remains standard for companies and self-employed individuals in Germany, with some simplification and possible reductions for less critical documents introduced recently. Landlords should adhere to similar practices to ensure compliance with tax and rental law requirements. This underscores the importance of compliant, audit-proof document archiving solutions for all these groups.
Originals of the documents are ideal, but the rules allow for digital storage under strict requirements for authenticity, completeness, and traceability. In cases of gross negligence or intent, there's a risk of fines or criminal tax proceedings for the destruction or falsification of documents. Private individuals should also keep tax assessment notices they receive from the tax office for at least six years, in the event of subsequent inquiries or subsidy applications.
Lars Klingbeil, the successor of Christian Lindner, plans to reverse this reduction and extend the retention period back to ten years. Keeping these changes in mind, it's crucial for businesses and individuals to stay informed and compliant with the evolving document retention regulations in Germany.
[1] German Fiscal Code (Abgabenordnung, AO) [2] UK landlord guidance (not applicable to German document retention periods) [3] Fourth Bureaucracy Reduction Act [4] Lindner's reduction of retention period from ten to eight years [5] Requirements for machine-readable and immediately accessible data by tax authorities
In the revised German document retention regulations, personal-finance records such as invoices and tax-related documents for self-employed individuals and private individuals also have a retention period of 10 years, similar to that of companies. Landlords, while not having specific retention periods outlined for tenancy-related documents, should retain important documents like rental contracts, tax documents, and proof of income for at least 10 years to comply with tax and legal requirements.
