Tax Advisory for Doctors and Medical Practices

Running a medical practice involves important business decisions alongside patient care. Staffing costs, equipment purchases and different sources of income shape your practice's financial performance. Cash flow also depends on when fees are received and taxes fall due. Accurate financial accounting and professional tax advice help you understand your practice's finances and plan ahead.

SKD Tax Advisory supports doctors in private practice and medical partnerships with ongoing financial accounting, payroll, annual profit calculations, tax returns and tax advice.

We work with medical practices throughout Germany. Our processes are fully digital, but our advice remains personal.

Financial Accounting for Medical Practices
Medical practices receive income from a variety of sources, including payments through the regional Associations of Statutory Health Insurance Physicians (Kassenärztliche Vereinigungen, KV), private patient fees and self-pay services. Salaries, premises, medical supplies and other operating expenses must also be recorded accurately.

We manage your ongoing financial accounting, recording transactions consistently and applying the appropriate tax treatment.

Open-item accounting (Offene-Posten-Buchhaltung, OPOS) is a standard part of our accounting services. It enables us to track outstanding receivables and payables systematically and reconcile payments as they are received or made.

You receive regular financial reports showing your practice's income, operating expenses and financial results. These give you a clearer picture of your practice's financial performance throughout the year, rather than only after the annual accounts have been prepared.

Payroll Services for Your Practice
Medical assistants, employed doctors and other members of your practice team are essential to daily operations. Staff costs also account for a significant share of your practice's expenses.

We handle monthly payroll, including the required payroll tax filings and social security reporting.

Our services cover a range of employment arrangements, including part-time positions, Minijobs (a specific form of low-earnings employment under German law) and additional payments such as bonuses.

Payroll documents are provided digitally, while staff costs are incorporated into your financial reports. This helps you keep track of personnel expenses alongside your other operating costs.

Annual Financial Reporting and Tax Returns
Many doctors in private practice in Germany use an Einnahmen-Überschuss-Rechnung (EÜR), a method of calculating taxable business profit based primarily on cash receipts and payments.

The timing of income and expenses is important, as is the tax treatment of equipment purchases and other investments.

Using the financial records we maintain throughout the year, we prepare your EÜR or, where required, annual financial statements, together with the relevant business tax returns.

We can also prepare your personal income tax return as part of our agreed services, allowing us to consider your practice's tax affairs alongside your personal tax circumstances.

We review tax assessment notices and help you plan and adjust advance tax payments.

VAT on Medical Services
Not every service provided by a doctor is exempt from German value added tax (VAT).

Under Section 4(14) of the German VAT Act (Umsatzsteuergesetz, UStG), qualifying medical care is generally exempt from VAT when its purpose is to prevent, diagnose, treat or cure illnesses or other health conditions.

The therapeutic purpose of the service is the key consideration. Whether a health insurer covers the cost or the patient pays privately does not, by itself, determine the VAT treatment.
Individual health services (Individuelle Gesundheitsleistungen, IGeL) may therefore also qualify for VAT exemption.

Medical expert reports, aesthetic procedures and other services outside conventional patient care require closer examination. Their VAT treatment depends on the nature and purpose of the service and, where relevant, the medical reasons for providing it.

Clear documentation of the medical purpose is particularly important when the VAT treatment is not straightforward.

VAT questions can also arise when medicines or medical aids are supplied separately, medical equipment is made available for use, or services are provided through practice-sharing arrangements and joint equipment or laboratory facilities. In some cases, it is necessary to determine whether a supply is independent or forms part of VAT-exempt medical treatment.

Input VAT and Practice Investments
Medical practices providing both VAT-exempt treatments and taxable services need to pay particular attention to input VAT recovery.

VAT on purchases and expenses directly attributable to exempt medical treatments is generally not recoverable. Where costs relate to both exempt and taxable activities, input VAT must be allocated appropriately and apportioned where necessary.

These rules can have significant financial consequences when investing in medical equipment, practice facilities or premises.

Cross-border transactions may also create German VAT obligations. Buying equipment from another EU member state or purchasing certain services from overseas suppliers can trigger VAT requirements, even when most of a practice's services are exempt.

We help you determine the correct VAT treatment of your services, record them appropriately in your financial accounts and assess whether input VAT can be recovered. We also consider VAT implications when you are introducing new services or planning significant investments.

Business Advisory for Medical Practices
A profitable practice may still face cash shortages when investments, tax payments or personal withdrawals fall due.

Delays in receiving fees, changes in operating costs and major purchases can all affect your practice's financial position.

Drawing on your ongoing financial accounting, we help you assess changes in income and expenses, review cash flow and plan for upcoming tax payments.

If you are considering purchasing medical equipment, hiring additional staff or making other significant changes to your practice, we can assess the financial and tax implications with you.

Our aim is to give you meaningful financial information to support your business decisions.

Joint Medical Practices and Professional Partnerships
Doctors in Germany can work independently or through various forms of professional cooperation. These include Berufsausübungsgemeinschaften (joint medical practices), Praxisgemeinschaften (practice-sharing arrangements) and other partnership structures.

Each arrangement has implications for accounting, profit allocation, shared services and the treatment of income and expenses.

In medical partnerships, particular attention may be required when dividing profits between partners or accounting for assets personally owned by a partner but used by the practice. Depending on the circumstances, such assets may be treated as Sonderbetriebsvermögen (special business assets) under German tax law.

Another important consideration is the distinction between professional and commercial income. Certain commercial activities or changes in a partnership's structure can affect how its income is classified for tax purposes. In some circumstances, the consequences extend to the partnership's income as a whole.

We advise on the tax implications of professional cooperation and support practices when their partnership arrangements or ownership structures change.

Starting, Acquiring or Transferring a Medical Practice
Opening or acquiring a medical practice involves financial commitments that can have consequences for many years.

Financing, the tax treatment of the purchase price, depreciation and future cash requirements all need careful consideration.

Before establishing or taking over a practice, it is important to assess the investment required, expected operating costs, available funding and anticipated tax liabilities.

Similar questions arise when a new partner joins, an ownership interest is transferred or you are planning to sell your practice or hand it over to a successor.

We provide tax advice at these important stages, helping you understand the financial and tax consequences before you make a commitment.

Digital Collaboration and Personal Advice
SKD Tax Advisory works entirely digitally, serving medical practices throughout Germany.

Documents are shared electronically, financial accounting and payroll are handled digitally, and financial reports are available online.

We use established DATEV solutions, including DATEV Unternehmen online, to exchange accounting documents and information securely.

With clearly defined procedures and regular processing, your financial records are maintained throughout the year rather than being compiled only when annual tax returns are due.

Digital tools do not replace personal contact. Whether you want to discuss your practice's financial performance, an investment or a planned change to your business, we are available to speak with you directly by telephone or video conference.

Digital tax advisory with personal service and reliable support across Germany.

Changing Your Tax Advisor
Are you considering changing the tax advisor for your medical practice?

We begin by discussing the services you need and reviewing the current status of your financial accounting, payroll and outstanding tax obligations.

A smooth transition depends on complete accounting records, relevant payroll data and timely coordination with your previous tax advisor.

We work with medical practices looking for ongoing tax advice, well-organized digital processes and a long-term professional relationship.

Arrange a free 15-minute introductory meeting to discuss your requirements and whether our services are a good fit for your practice.