The German Council approved last 18th October the 4th Bureaucracy Relief Law, with the aim of alleviate economic pressures and to simplify the fiscal process for entrepreneurs and citizens. This document contains significant changes, as time limits for maintaining accounting documents will be reduced and, also, Advanced VAT return will get more benefits from a new regulatory framework. 

Preservation periods 

Previously, the retention period for tax documents was between six and ten years. From right now, this period is reduced from ten to eight years for accounting documents, only invoices. Financial statements, books and records, inventories, management reports, opening balance sheets, among others, must be retained for ten years. You can also check for exceptions and periods in the established Article 147 of the Tax Code. 

New regulation on advance VAT returns 

Prior to this law, VAT returns are filed on a mothly basis for any business whose total VAT payable in the previous year exceeded 7.500€. If the VAT payable is below the previous amount mentioned, VAT returns will be filed on a quarterly basis.    

Therefore, this new legislation, which comes into force on 1st January 2025, increases the threshold for filing monthly VAT returns to 9.000€ of VAT payable. Consequently, all companies that paid the tax office less than 9.000€ of VAT payable in 2024 will be able to benefit from the quarterly rate in 2025 by filing the VAT return in advance. 

If you would like us to help you with your tax declarations, accounting or payroll in Germany and/or other countries, please do not hesitate to contact us.

Auxadi can become your ideal partner. We offer a one stop shop value added outsourcing services in the areas of accounting and reporting, tax compliance, payroll management and representation services, among others.