Services · Audit & accounts for foreign companies

Audit and reporting in Germany

HGB thresholds, statutory audit, publication and e-Bilanz, step by step. Open pricing, final quote fixed in writing before work starts.

Who must keep books and file accounts in Germany

A German company runs three reporting streams at once, and they are routinely confused. The first is the commercial balance sheet under the HGB (Handelsgesetzbuch), prepared for shareholders, banks and mandatory publication. The second is tax reporting to the Finanzamt: corporate tax, trade tax and VAT returns plus the electronic tax balance sheet, e-Bilanz. The third is the audit, which only switches on above a certain company size.

The duty to keep books comes from § 238 HGB and applies to all merchants. GmbH, UG (haftungsbeschränkt), AG, SE and KGaA additionally apply §§ 264 onwards: the annual accounts consist of a balance sheet, a profit and loss account and notes (Anhang), and companies above small size also prepare a management report (Lagebericht). A GmbH & Co. KG with no individual among its general partners is treated as a corporation under § 264a HGB. Large non-corporate structures fall under the separate disclosure act (Publizitätsgesetz).

Books are kept in German and in euro (§ 244 HGB). Having no activity changes nothing: a dormant GmbH still prepares a nil set and publishes it exactly as a trading company does. A German branch of a foreign company does not prepare its own accounts but must disclose the head office accounts under § 325a HGB, in German or in an English version with a certified translation.

HGB size classes and the 2026 thresholds

Everything that follows - the scope of the accounts, whether an audit is compulsory, the deadlines and how much becomes public - is driven by the size class. There are four classes and three criteria: balance sheet total, turnover for the twelve months before the reporting date, and the average number of employees over the year. The thresholds were raised by roughly a quarter and apply in their current form to financial years from 2024 onwards, 2026 included.

The table reads backwards compared with what most people expect: a company belongs to a class if it does not exceed at least two of the three thresholds. Large means exceeding at least two of the medium thresholds.

One good or bad year does not move you. Under § 267 Abs. 4 HGB the consequences follow only if the thresholds are exceeded, or stop being exceeded, on two consecutive reporting dates. A newly formed company is classified by its first reporting date. The balance sheet total follows HGB rules: a capital deficit shown on the asset side is not counted.

Two exceptions break the arithmetic. A capital market oriented company within the meaning of § 264d HGB always counts as large, whatever the numbers say. Groups are assessed separately: the exemption from consolidated accounts under § 293 HGB applies where the gross method figures of €30m balance sheet total, €60m turnover and 250 employees are not exceeded, or the net method figures of €25m, €50m and the same 250 employees. It does not apply if the parent or any subsidiary is capital market oriented.

Who must be audited and who may sign the opinion

§ 316 HGB is short: the annual accounts and the Lagebericht of companies that are not small within § 267 Abs. 1 HGB must be audited. Audit is therefore compulsory for medium and large companies, while small and micro companies are exempt. Consolidated accounts are always audited where they are prepared at all.

The key consequence sits in the same provision: if no audit has taken place, the annual accounts cannot be formally adopted. That is not a fine, it is a dead end - there are no adopted accounts, so there is no lawful basis for a profit distribution and nothing to publish. If the accounts are changed after the opinion has been issued, the amended parts must be re-audited (Nachtragsprüfung).

Large companies may only be audited by a Wirtschaftsprüfer or an audit firm. A medium sized GmbH may also be audited by a vereidigter Buchprüfer or an equivalent firm (§ 319 Abs. 1 HGB). Independence rules are strict: an auditor may not audit accounts they helped prepare. The practical result is that the Steuerberater who keeps your books and drafts the balance sheet cannot audit the same company, so you need two separate firms.

The roles are not interchangeable. A Steuerberater handles bookkeeping and payroll, prepares the annual accounts and tax returns, files the e-Bilanz and represents the company before the Finanzamt; the default fee basis is the statutory scale tied to the value of the matter (StBVV), though the parties may agree another model in writing, hourly included. A Wirtschaftsprüfer only audits and issues the opinion and does not replace the accountant. A small company needs the first; from medium size you need both.

An opinion can be unqualified, qualified or adverse, and in the worst case the auditor declines to issue one. A qualification or a refusal is visible to anyone who opens the published set and resurfaces in due diligence for years.

A subsidiary can be exempted from audit and publication under § 264 Abs. 3 HGB, but every condition must be met at once: consent of all shareholders for the specific year, inclusion in the consolidated accounts of an EU or EEA parent audited under the EU directives, a declaration by the parent that it will stand behind the subsidiary obligations, disclosure of the exemption in the notes to the consolidated accounts, and publication of the whole package under § 325 HGB. Miss one item and the full obligation returns.

There is no fee scale for audits in Germany; the fee is negotiated. Published market benchmarks for a typical medium sized GmbH run from a few thousand to a few tens of thousands of euro a year, with the spread driven by transaction volume, bookkeeping quality, group structure and inventory. The only reliable figure is a written proposal from a specific firm after it has seen your data. Sustainability reporting is a separate track: the CSRD is still being transposed into German law and the timelines for the second and third waves have been pushed back at EU level, so the status has to be checked at the time you prepare the accounts.

Deadlines: preparation, adoption, filing

The deadlines run as a chain: you cannot adopt what is not finished and you cannot file what has not been adopted.

Twelve months to publish is not twelve months of working time. The accounts are prepared within three or six months, then audited where required, then adopted by shareholder resolution, and only then filed. A company with a statutory audit really has about six months of slack, not a year. The deadline is met at the moment of transmission, not when the publication appears.

Filing with the Unternehmensregister and what becomes public

The recipient changed on 1 August 2022: documents for financial years beginning after 31 December 2021 go to the Unternehmensregister rather than the Bundesanzeiger, submitted through the publication platform or a software interface. Earlier periods stay in the old channel.

How much is disclosed depends on the class:

• Large - the full set: balance sheet, profit and loss account, notes, Lagebericht, audit opinion and the resolution on profit appropriation.
• Medium - the same set with limited relief under § 327 HGB; the exact list of reductions is settled when the package is prepared.
• Small - balance sheet and notes only, and the notes may leave out information relating to the profit and loss account (§ 326 Abs. 1 HGB). The profit and loss account itself is not published.
• Micro - the balance sheet may be deposited instead of disclosed (§ 326 Abs. 2 HGB): it is not put on open display and is released only on a separate paid request. The company must declare to the register that it does not exceed two of the three criteria in § 267a HGB.

Publication itself is cheap - the platform tariffs published openly point to a few tens of euro per set. What costs money is preparing what gets published.

There is an uncomfortable side to this. Your published balance sheet is read by competitors, suppliers and anyone curious about your structure. In Germany that is simply how business works, and a German GmbH is not a route to privacy. Deposit for a micro company is the only lawful way to reduce visibility.

e-Bilanz, corporate tax and VAT

Alongside the commercial balance sheet, the company transmits an electronic tax balance sheet to the Finanzamt. Under § 5b EStG the content of the balance sheet and the profit and loss account is transmitted as an officially prescribed data set by electronic transfer - in practice an XBRL taxonomy that is updated every year; taxonomy 6.9 applies to 2026 financial years.

The scope of the e-Bilanz keeps widening. For financial years beginning after 31 December 2024, uncompressed account listings were added: account number, account name and balance for every balance sheet item carrying a value. The next expansion is tied to years beginning after 31 December 2027. Transitional relief has been issued for the account listings, so the actual scope for a given year is confirmed at filing time.

On rates: corporate tax is 15%, plus a solidarity surcharge of 5.5% on the tax itself, giving 15.825%. Trade tax comes on top - a 3.5% base rate multiplied by the municipal multiplier - which puts the usual total burden on GmbH profit at roughly 29-30%, though a specific city can be noticeably higher or lower. A law passed in 2025 cuts corporate tax from 2028: 14% in 2028, then one point a year down to 10% from 2032. That already affects the accounts, because deferred taxes under the HGB are measured at the rates expected when the difference reverses. More detail sits in taxes in Germany.

The VAT rhythm is set by last year VAT liability:

Preliminary returns are due on the tenth day after the period ends. A permanent extension (Dauerfristverlängerung) moves that by a month and, for monthly filers, requires a special advance payment. Intra-EU supplies also trigger a recapitulative statement, and Intrastat applies above the statistical thresholds, which are revised periodically and confirmed before filing.

GoBD, source documents and e-invoicing

The GoBD is a federal finance ministry circular on how books and documents are kept and stored electronically. Formally it is not a statute, but it is the yardstick a tax audit uses to decide whether your bookkeeping can be trusted. The requirements are traceability, completeness, accuracy, timeliness, order and immutability. The last one hurts most: if an entry can be changed retroactively without leaving a trace, the bookkeeping is formally defective, and an ordinary spreadsheet without version control does not meet it. The base circular dates from 2019 but has been revised since, including for e-invoicing, so the current version is checked when processes are set up.

The second practical element is process documentation (Verfahrensdokumentation): a description of how a document is created or received, checked, processed, stored and archived, including the systems and access rights involved. During an audit the inspector may demand access to the data and a machine readable export. Missing documentation is not an assessment in itself, but it badly weakens your position in a dispute.

Retention periods changed in 2025: accounting vouchers (Buchungsbelege) are now kept for eight years instead of ten (§ 147 Abs. 3 AO, § 257 Abs. 4 HGB). Commercial books, inventories, annual accounts and the Lagebericht still run to ten years, and commercial correspondence to six. Banks, insurers and investment firms follow a separate transitional regime. The shorter period does not apply where an audit or dispute is open for that year.

E-invoicing runs on its own timetable. Since 1 January 2025 a German company must be able to receive electronic invoices on domestic business to business transactions. Issuing them becomes compulsory later: from 1 January 2027 where previous year turnover exceeds €800,000, and from 1 January 2028 for everyone else. Formats follow EN 16931, in practice XRechnung and ZUGFeRD. You must archive the structured original, not a printout or a PDF rendering.

Late filing penalties and how they are applied

Publication is policed not by the tax office but by the Federal Office of Justice (Bundesamt für Justiz). It acts on its own initiative using data on who failed to file on time; the process is mass scale and automated, so counting on being overlooked is a poor plan.

The mechanics are as follows. First comes a formal threat naming a specific amount and giving six weeks either to publish the complete set or to file a written objection. If neither happens, the penalty is imposed. The § 335 HGB range is €2,500 to €25,000. If the documents are published after the six weeks but before the decision, the minimums drop to €500 for a micro company and €1,000 for a small one. For capital market oriented companies the ceiling is in another league - up to €10m, or 5% of annual turnover, or twice the benefit obtained, whichever is higher.

Two points are routinely underestimated. First, the procedure repeats until the obligation is met, and the cost of the procedure is charged on top of the penalty. Second, it can be addressed to the company and to the members of the management body personally - a GmbH managing director receives the demand in their own name.

One thing matters specifically in 2026. The office announced that for reporting dates of 31 December 2024, where the publication deadline expired on 31 December 2025, proceedings will not start before mid March 2026, and that this is the final such postponement. For the 2025 accounts the familiar grace period is gone, so treat 31 December 2026 as a hard date.

The tax side is counted separately. A late filing surcharge under § 152 AO runs at 0.25% of the assessed tax for every month started, with a floor of €25 a month; where the return is more than fourteen months late it is imposed as a matter of course. The tax office may also apply coercive fines (Zwangsgeld) and, if no return arrives at all, estimate the base under § 162 AO - usually with a margin that is not in your favour, leaving you to challenge the estimate.

What can go wrong and who this is not for

• An audit cannot be squeezed into December. Some procedures are tied to dates: inventory observation, confirmations from banks and counterparties, review of post balance sheet events.
• The same person cannot prepare and audit. If your Steuerberater does the books and the balance sheet, the auditor must be a different firm. That costs more and needs to be budgeted in advance.
• Class changes lag in both directions. Crossing the thresholds bites only on the second consecutive reporting date, and falling below them does not release you from audit immediately either. A company that exceeds the thresholds in 2025 and 2026 is audited from 2027, so the auditor is engaged well before that.
• No audit blocks everything downstream. Accounts that are not adopted leave no lawful basis for dividends and draw questions from banks at facility renewal.
• A dormant company still costs money. Nil accounts are still prepared, filed with the tax office and published, and the Office of Justice fines dormant and trading companies alike.
• Liquidation does not erase the past. Open years still have to be filed, and penalty proceedings already started do not stop by themselves.
• Home made bookkeeping creates audit risk. Editable spreadsheets, no process documentation and PDFs instead of structured invoice originals are the classic grounds for challenges and estimated assessments.
• Switching accountants mid-year is expensive. Migrating data and repairing gaps in the ledgers usually costs more than the fee saving that prompted the move.

Germany as a home for an operating company does not suit everyone. Not those who need privacy: the balance sheet will be visible. Not those chasing minimal administrative cost: even a dormant GmbH carries a full annual cycle of bookkeeping, e-Bilanz, returns and publication. Not those hoping to run everything remotely without a German speaking adviser, since correspondence with the Finanzamt and the Office of Justice is in German and on hard deadlines. And not those with no real substance in the country.

If the point is access to the EU market, working with German counterparties and the standing of a German legal entity, the cost is justified. In that case start with GmbH formation and a bank account, and build the reporting around the class the company will land in two years from now.

Fees

Below is the cost of our work. Auditor fees, publication platform charges and government fees are not included.

Prices are indicative and cover our work on a typical case. We confirm the exact quote in writing after a short call - you know the final number before we start. Government fees and bank tariffs are billed separately unless explicitly included. Other jurisdictions are listed under audit and accounts for foreign companies.

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