Annual Financial Statements for Businesses in Germany 

Annual financial statements give you a clear view of how your business performed over the year and where it stands financially at year end. They also provide the starting point for the related tax work and for planning ahead.

SKD Tax Advisory prepares annual financial statements and Einnahmen-Überschuss-Rechnungen (EÜR), a cash-basis method of determining taxable business profit under German tax law, for businesses, self-employed professionals and healthcare practices throughout Germany.

We use the figures to identify relevant developments, assess their tax implications and provide a sound basis for planning ahead.

We prepare annual financial statements digitally and integrate them with our ongoing work in financial accounting, tax returns and tax advice.

For businesses required to prepare annual financial statements under German law, we handle the necessary closing entries and prepare the financial statements in accordance with German commercial and tax law.
Depending on the type and size of the business, this may include:

• balance sheet and profit and loss account
• year-end adjustments and accruals
• fixed assets and depreciation
• valuation of receivables, liabilities and other balance sheet items
• recognition and measurement of provisions
• notes to the financial statements, where required
• preparation and electronic filing of the German E-Bilanz
• filing or publication of the annual financial statements, where required

EÜR for Self-Employed Professionals and Other Businesses

Many self-employed professionals, healthcare practices and smaller businesses are not required to prepare annual financial statements. Instead, they determine their taxable profit using an EÜR.

An EÜR involves more than simply adding up income and expenses.

When preparing the EÜR, we consider matters such as:

• depreciation
• investment deduction allowances (Investitionsabzugsbeträge – IAB)
• deductible business expenses
• owner contributions and withdrawals
• fixed assets and planned investments

Investment deduction allowances can be particularly useful when planning investments and managing taxable profits across different tax years.

We also consider the EÜR together with the personal income tax position so that business and private tax matters can be assessed as a whole.

From Financial Accounting to Annual Financial Statements

Well-organised financial accounting throughout the year makes the preparation of annual financial statements more efficient.

If invoices, bank transactions and significant business events are recorded promptly and consistently, many questions can be resolved before the financial year closes. This reduces avoidable follow-up questions and provides better financial information throughout the year.

For our ongoing clients, financial accounting, annual financial statements and tax returns are part of one connected process.

 Effective Tax Planning Starts Before the Financial Year Ends

Many planning opportunities depend on decisions being made at the right time. Current accounting figures help us assess how the year is developing and whether action should be taken while there is still time to do so.

For ongoing clients, we therefore review relevant developments during the year and discuss tax planning options when action may be worthwhile.

Once the annual financial statements are complete, we use the results to identify issues and opportunities that should be considered in the year ahead.

Understanding Your Financial Results

Annual financial statements provide more than a final profit figure. They show how key areas of the business have developed over the year.

Depending on the business, useful questions may include:

• How have revenue and profit developed?
• Which costs have changed significantly?
• How are receivables and liabilities developing?
• How has equity changed?
• What impact have investments and depreciation had on the result?

• Which developments should be monitored more closely in the coming year?

We highlight significant developments and explain what the figures mean for your business.

Used in this way, annual financial statements support both tax planning and business decisions.

Annual Financial Statements and Tax Returns

Annual financial statements and tax returns belong together. The figures reported in the accounts determine key elements of the related tax returns and can also affect your overall tax position.

We therefore consider both together and use the results as a basis for further tax planning.

Changing Tax Advisor

If you are moving to SKD Tax Advisory, we first review the accounting data and documents available and identify what is still needed to complete the annual financial statements.

We then set out what remains to be done and how we will proceed.

A complete and well-organised transfer of accounting data helps ensure a smooth transition and provides a reliable basis for preparing the annual financial statements and tax returns.

Digital Preparation. Personal Year-End Review.

Documents and supporting information are exchanged digitally, allowing us to work efficiently with clients throughout Germany.

Once the annual financial statements are complete, we review the results with you and explain the key developments and their implications for your business and tax position.

Digital processes make preparation more efficient, but professional judgement and personal advice remain essential.

Are you looking for support with your annual financial statements or EÜR, or are you considering moving to SKD Tax Advisory?

Book a free 15-minute introductory meeting to discuss your needs and find out whether SKD Tax Advisory is the right fit for you.