Maintain the documentation until that point in time.
Private individuals and self-employed persons in Germany are required to retain tax-related documents for a specific period, as outlined by the German Fiscal Code (Abgabenordnung, AO).
Standard Retention Period
The general retention period for tax-relevant documents, including invoices, accounting records, bank statements, and other documents pertinent to tax and commercial purposes, is 10 years. This period begins at the end of the calendar year in which the relevant document was created or the transaction took place [1][2].
Retention Obligation and Benefits
Adhering to these retention periods helps ensure tax compliance, facilitates audits by tax authorities, and prevents fraud. By keeping these documents, individuals and businesses can provide necessary evidence during tax audits and investigations [1][2].
Recommended Retention Periods for Specific Documents
While the general retention period is 10 years, certain documents may have shorter retention periods. For instance, offers and commercial letters may only need to be kept for six years [1]. However, for most tax-important documents, the 10-year rule applies.
Expert Recommendations
Experts recommend that private individuals and freelancers adhere strictly to these retention periods to avoid penalties and difficulties in proof during tax audits [1][2]. The Consumer Center advises downloading bank statements regularly for backup purposes.
Insurance provider Arag suggests keeping tax-relevant documents for about six years, while the Association of Taxpayers (Vereinigte Lohnsteuerhilfe e.V.) recommends keeping tax-relevant documents such as donation receipts, pharmacy receipts, or office supplies invoices for at least four years after submitting a tax return.
Retention Periods for High-Income Earners
For people with incomes exceeding 500,000 euros, the retention period is six years. From 2027, this increases to seven and a half years for incomes over 750,000 euros [1].
Unclear Retention Periods for Private Individuals
It is not specified in the text whether there are specific retention periods for tax documents for private individuals in the German Fiscal Code (AO). For private individuals, the retention periods for tax documents are not clearly regulated by law, but there are recommendations for a minimum retention period.
Importance of Document Retention
The retention of numerous documents can be crucial for preparing the tax return, but keeping them year after year can fill your office with folders. It is important to note that the tax office can demand documents at any time, even if the tax assessment notice is provisional or sent under reservation.
In conclusion, adhering to the retention periods for tax-related documents is essential for both private individuals and self-employed persons in Germany. The general retention period is 10 years, but certain documents may have shorter retention periods. To avoid penalties and difficulties in proof during tax audits, it is recommended to strictly follow these retention periods.
[1] German Fiscal Code (Abgabenordnung, AO) Section 147 [2] Consumer Center [3] Arag [4] Vereinigte Lohnsteuerhilfe e.V.
Maintaining tax-relevant documents, such as invoices and bank statements, for the specified retention periods is crucial for personal-finance management, as it facilitates audits by tax authorities, ensures tax compliance, and protects against fraud. Adhering to the 10-year rule, as recommended for most documents, can provide necessary evidence during tax audits and investigations.
Experts also advise private individuals and self-employed persons to download bank statements regularly as part of their personal-finance record-keeping. Regularly updating these documents can aid in managing taxes efficiently and reduce the risks of penalties and difficulties during potential audits.
