Starting a Business in Germany – Tax Advice from Day One
Starting a business involves important tax and financial decisions from the outset. Business structure, financing, VAT, financial accounting, payroll and the organisation of ongoing tax processes can all have a lasting impact on how the business develops.
SKD Tax Advisory supports entrepreneurs as they set up their businesses and can continue to provide ongoing tax services afterwards – including financial accounting, payroll, tax returns and annual financial statements.
Our role is not limited to completing the initial tax formalities. We help establish processes that fit the business from the start and can develop as the business grows.
Tax Advice Before Your Business Starts
Some of the most important tax decisions need to be considered before business activities begin.
Depending on the plans for the business, this may include:
- choosing an appropriate business structure
- considering the tax treatment of planned investments
- VAT implications
- financing arrangements
- ownership and participation structures
- the expected development of the business
The right approach depends on the individual plans.
A self-employed professional starting alone has different requirements from a business that expects to employ staff from the outset or a company being established by several shareholders.
From Tax Registration to Financial Accounting and Payroll
Once the business is established, the necessary tax and administrative processes need to be put in place.
Depending on your requirements, we can assist with:
- tax registration and communication with the German tax office
- tax aspects of the chosen business structure
- VAT and specific VAT issues
- setting up financial accounting
- setting up payroll
- establishing digital document and DATEV processes
- planning investments and depreciation
- financial and cash flow planning
- ongoing tax returns
- annual financial statements or an Einnahmen-Überschuss-Rechnung (EÜR), the German cash-basis method for determining taxable business profit
Setting these processes up properly at the beginning is usually much easier than reorganising them later.
Digital Financial Accounting from the Start
Financial accounting is not only needed for tax compliance. It also provides the financial information required to understand how a new business is developing.
We therefore establish digital processes from the beginning.
Documents can be provided through DATEV Unternehmen online, bank transactions can be transferred through the DATEV system, and financial reports can be made available digitally.
This creates a consistent basis for ongoing tax advice, tax returns and annual financial statements as the business develops.
Plan Payroll Early
If employees are part of the business from the outset, or recruitment is planned soon after launch, payroll should be organised early.
Employing staff creates regular reporting obligations for payroll tax and social security. Questions concerning remuneration, personnel costs, one-off payments, absences and employee benefits can also become relevant from an early stage.
We can integrate payroll into the overall accounting and tax process from the beginning.
This allows financial accounting, payroll and ongoing tax work to operate on a consistent basis.
Investments and Financing
New businesses often require significant investment.
Equipment, vehicles, IT systems, machinery or business premises can all have tax consequences, and the timing and structure of an investment may affect the tax position.
Financing decisions should also be considered in the wider context of the business. Loan repayments, interest costs and cash requirements need to be compatible with the expected development of revenue and profitability.
We therefore consider investment decisions, financing and their tax implications together where appropriate.
Use Financial Information to Manage your Business
The first few years are particularly important for understanding whether revenue, costs and cash flow are developing as expected.
Regular financial accounting provides an important source of information.
We use the available figures not only for tax purposes, but also to identify developments that may be relevant for business decisions.
This can be particularly useful when considering:
- further investment
- hiring additional employees
- changes in financing
- changes in cost structures
- future business planning
Reliable financial information makes it easier to make decisions on the basis of actual business performance rather than assumptions.
From Launch to Ongoing Tax Support
Good tax support should continue beyond the initial setup of the business.
Where we are involved from the beginning, financial accounting, payroll, tax returns and annual financial statements can be organised on a consistent basis from day one.
We also become familiar with the development of the business and can take that history into account when advising on future decisions.
The result is an ongoing tax advisory relationship that can develop alongside the business.
Digital Tax Advice Throughout Germany
SKD Tax Advisory works with entrepreneurs and new businesses throughout Germany.
Documents are exchanged digitally and meetings can be held by video, so there is no need for the business to be located near our office.
What matters is whether the business, the services required and the intended working relationship are a good fit.
Are You Planning to Start a Business?
If your plans are already taking shape, an introductory meeting can help establish which tax matters need to be considered and which ongoing services you may require.
It is useful if you can tell us:
- what type of business or professional activity you are planning
- when you expect to start
- whether you intend to employ staff
- what investments are planned
- whether external financing will be required
Book a free 15-minute introductory meeting to discuss your plans and find out whether SKD Tax Advisory is the right partner for your business from the start.