After a successful incorporation process the shareholders and executive directors can finally relax. The company is officially registered, the local tax office has provided the company's Tax ID and VAT number. Ideally, the first customers appear and slowly but surely the company starts to function as it should. However you cannot forget about the fees and costs required to sustain your company. There are some costs that do not depend on the company's activities and we collect them for you.
Every company that is registered in Germany will automatically get membership of one or both of the local chambers. For the GmbH and UG that is the German Chamber of Commerce and Industry the so called "Industrie- und Handelskammer (IHK)". Those companies that pursue crafts’ activities and manual labour (e.g. blacksmith, carpenter, cleaning companies) must join the local “Handwerkskammer” (HWK) chamber as well. In case the above mentioned German company is not active, or has low income, the company could be absolved of paying the membership by the HWK, but not by the IHK.
The IHK membership fee varies from city to city. The local chambers decide on the amount of the fee every year. In 2020 it averages between 80 and 150 EUR for non-active companies as well..
|Chamber of Commerce||Yearly fee (min.)|
|IHK Berlin||64 EUR|
|IHK Frankfurt am Main||200 EUR|
|IHK für München und Oberbayern||150 EUR|
|IHK Nürnberg für Mittelfranken||120 EUR|
Currently, the controversial “Rundfunkbeitrag” finances the German public media. This fee has to be paid by every household and company that has a German branch. The exact amount would be calculated based on the number of your company's branches, employees and cars. The base fee in 2020 is 5,83 EUR per month for one branch, one employee and zero company car. Only holding companies can get a release of payment from Rundfunkbeitrag.
The monthly bookkeeping tasks are:
- assigning the invoices to the monthly cash flow
- submitting the monthly and quarterly VAT declaration
- employee registration and monthly payroll calculation
- monitoring the company's finances.
The tax system in Germany is one of the most complex and changeable in the European Union. This is why it is very important to rely on a professional accountant in Germany. How should you choose a good and reliable tax expert? Before the first meeting ask the accountancy company to provide the document about its chamber membership (Steuerberaterkammer). Every accountancy company must have this document.
Some accountants work on an hourly fee rate, while others have a fixed monthly fee.
Preparation of the annual financial statement incurs expenses every year. Unfortunately, many forget about these and the accountants are no exception. It is obligatory for every GmbH and UG in Germany to prepare a financial statement every year. This has to contain the following information:
- Summary of annual accounting
- Balance sheet of the business year
- Local business tax declaration
- Corporate income tax declaration (and appendix in case of bigger companies)
The companies must provide the completed balance sheet for the so-called Bundesanzeiger. According to the German commercial law (HGB) small businesses are not obligated to publish the above mentioned documents, but obligated to store them in Bundesanzeiger. Thus, the balance sheets provided by small businesses won’t be visible to other parties.
It is difficult to forecast the cost of the preparation of the annual account. The total amount varies from the balance sheet, the amount and sum-total of invoices in the year and the time spent by the accountant in the preparation of the financial statement. You should calculate between 700 EUR and 2000 EUR for this in the first few years after the incorporation. The fee of Bundesanzeiger which is 14-50 EUR is included in this amount in the first year annual closure.
The good news is that you have approximately 12 months to prepare the annual financial statement. This means that the annual closure of 2020 must be completed and sent to the Bundesanzeiger by 31 December 2021.
In case you have your own office or your company registered to your home address in Germany you do not have to calculate the fee of registered office service renting. Generally, the cost of a registered office service averages between 120 and 250 EURin 2020.
Author is Kristof Tomasz: Multipreneur and founder of the GmbH-UG.com (Tomasz Consulting GmbH) consulting company