Tax deadlines – Notes – Year end 2018 – Company – Part I

Church tax on investment income

Church tax on private investment income (see Section 32d EStG) is automatically withheld by the debtor of the investment income (e.g. bank, financial services provider, insurance company or corporation) and paid to the tax office, if applicable. The paying agents retrieve the data required for this from the Federal Central Tax Office and make the deduction accordingly if the investor is liable for church tax. This regular survey shall be conducted annually during the period from September 1 through October 31.

Retention periods

Certain retention periods apply to accounting records (cf. Section 147 AO). If necessary, a provision can be made in the annual financial statements for the future costs of storing these documents. Upon expiration of the statutory periods, the following documents in particular may be destroyed after December 31, 2018:

10-year retention period:
– Books, journals, accounts, etc., where the last entry was made in 2008 and earlier
– Annual financial statements, management reports, opening balance sheets and inventories prepared in 2008 or earlier, and the documents required for their understanding
– Accounting documents (e.g. invoices, notices, payment instructions, bank statements,10 payrolls, travel expense statements, entertainment receipts) from 2008

6-year retention period:
– Payroll accounts and documents (certificates) for the payroll account with entries from 2012 or earlier
– Other documents (e.g., export or import records, order books, bills of lading, expired loan agreements, insurance policies) and business letters from 2012 or earlier

All records that are relevant to understanding and verifying recordkeeping obligations must be retained; this applies both to records in paper form and to all records in the form of data, data sets and electronic documents that show that the regulatory requirements and compliance with them have been implemented. Incoming electronic invoices, commercial and business letters, or other significant documents must be retained unchanged in the format in which they were received (e.g., in PDF or image format); they must not be deleted before the retention period expires. Conversion to another format is only permissible if machine evaluability (by the tax authorities) is not restricted and no changes are made to the content. The same applies to self-generated documents, such as outgoing invoices.

If paper documents are converted into electronic documents (“scanned”), the procedure must be documented, which ensures in particular that the content is identical to the original and that it is legible and complete.

The retention periods also apply to the data relevant for tax and social security purposes in the company’s IT system (financial, asset and payroll accounting). During the retention period, access to this data must be possible.

The retention period begins with the end of the calendar year in which the last entry was made in the book, the inventory, the opening balance sheet, the annual financial statements or the management report was prepared, the commercial or business letter was received or sent, or the accounting document was created, furthermore the recording was made or the other documents were created.
However, the destruction of documents is not permitted if the deadline for the tax assessment has not yet expired (cf. Sections 169, 170 AO).

(For more notes & information & examples on this, please see our Information Letter 10/2018 under Business Annexes).