When you run a business, you face many tasks. A rather annoying but indispensable task, in addition to the bookkeeping and writing invoices , is keeping your folders with various documents. Some of them contain important documents. Perhaps you have n’t paid much attention to retention requirements, but they are important to you. Here you can find out which retention periods apply to bank statements and the like.
What is meant by retention requirements?
The legislature specifies to an entrepreneur which retention periods must be observed when storing all business documents . The retention periods for documents exist because they are required for tax audits or disputes. In this way, all business transactions can also be traced back to those outside the company. If you are no longer able to run your business today, it must be clear to every successor or family member what was going on in your business and what the financial situation was like or with which customers you did business. However, it is also clearly regulated which documents must be kept for how long. As a rule, depending on the type of document, the storage obligation is between 6 and 10 years . It is essential to adhere to this, as some tax audits can also take place shortly before the retention period expires.
What are the legal bases for retention requirements?
It is actually regulated by law that a trader must keep his business records. You can find these regulations in the Commercial Code and the Tax Code, but also in the Tax Act and many others. Section 257 in the Commercial Code states, for example, that every merchant is obliged to keep certain documents in an orderly manner.
As a rule, all business people who also have to keep accounts are required to be kept. If you are considered a merchant, you are therefore also required to keep records. At the moment you deregister the business, however, you are not allowed to dispose of the documents. They must be kept and, under certain circumstances, can even be requested by the company’s successor in order to be able to understand various business transactions.
The retention requirements are regulated in the following codes of law:
- Commercial Code (HGB) §257 and §261
- Tax Code (AO) §147
- Sales tax law (UStG) §14b
- Income Tax Act (EStG) §147 AO
- Social Code (SGB) §28 IV
- Labor Act (ArbZG) Section 16 (2)
- Minimum Wage Act (MiLoG)
The only question left now is whether you are also obliged to keep it. The following table gives you an overview:
|legal form||person subject to retention|
|one-man business||Owner of the company|
|KG||Partners who are appointed to manage the company or who are personally liable|
|GmbH and UG||all shareholders|
What documents do you have to keep?
It looks like a lot and you will also need various folders to keep track of things. However, according to the HGB, the following documents must be kept:
- Trading books
- Opening balances
- Annual accounts
- Individual financial statements
- Situation reports
- Consolidated financial statements
- Group management reports
- commercial letters received
- dispatched commercial letters
- Receipts for bookings
The duration of the retention requirement is divided into categories from 1 to 4. Depending on the category, there are different retention periods between 6 and 10 years. To be on the safe side, read carefully which documents you have to keep and for how long. Certainly not all documents also apply to your company.
Where do these documents have to be kept?
The question now remains as to where these documents for tax returns and the like are to be kept. Regardless of how you store them, the important thing is that they are legible at all times . This means that, for example, receipts should be copied onto thermal paper so that they are really legible until the retention period expires. The documents may also no longer be changed afterwards . You would do well to issue your invoices correctly right away, because they must exactly match the customer invoices.
You can keep most of the documents in folders, but the original annual accounts or opening balance sheets must be available . In the case of business letters and invoices, it is sufficient if these are available in pictures but match the original. You can also save these on the PC. Documents relevant to tax law must be stored in such a way that they can be evaluated by machine . So paper, an optical archive or a microfilm would be a good solution here.
If you use an accounting program , you have all the documents in one place and can keep them electronically.
The where does not only refer to folders and data carriers, but actually also to the whereabouts of your company . According to tax regulations, all of your documents must be kept in Germany. According to the Commercial Code, on the other hand, the location does not matter, but you must be able to present the documents within a certain time upon request.