How long do you need to keep receipts and invoices for in Germany?

To Germany’s credit, the tax authorities in the country are generally given the powers and resources they need to tackle financial fraud, at least in comparison to some other countries.

The German love of probity and paperwork can take its toll on law-abiding citizens, however, many of whom breathed a sign of relief when former Federal Finance Minister Christian Lindner (FDP) reduced the retention period for accounting documents and invoices in Germany from ten to eight years.

Now, Lindner’s bid to cut bureaucracy looks like being reversed by his successor, Lars Klingbeil of the centre-left SPD.

What does this mean for companies, the self-employed, and landlords?

If Klingbeil gets his way companies, the self-employed, and landlords will all be required to keep documents, invoices, and receipts for a period of ten years, starting from the end of the calendar year in which the document was created, or the last entry was made.

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Ideally, this means the originals of the documents, not copies, although the rules do allow for digital storage provided strict requirements for authenticity, completeness, and traceability are met.

The same individuals or organisations are also required by law to store annual financial statements, inventories, and tax returns for the same period of time.

Under German law, some business documents including commercial letters and contracts only need to be kept for six years.

The tax office can legally request all these documents within the specified periods in order to audit companies and individuals and check tax returns. If you’re unable to provide the documents when asked to do so, the tax office can disallow the entire expense deduction, leading to higher taxable profits and a higher tax bill.

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In cases of gross negligence or intent (such as the systematic destruction or falsification of documents), there's a risk of fines or criminal tax proceedings.

What does this mean for private individuals?

While there is no general legal obligation for private individuals to keep hold of their receipts and invoices, there's often a good reason to file them away somewhere anyway.

As a general rule of thumb, warranties or guarantees tend to last for two years in Germany, so it’s a good idea to keep receipts for at least this length of time as proof of purchase.

Providing you have the appropriate invoices, you can also deduct 20 percent of the labour costs for household-related services from your tax bill (up to €4,000 for services including cleaning, gardening, and maintenance), and 20 percent for handyman services – such as repairs, renovations, or modernisation work in your home – up to a value of €1,200.

If you own and live in your home, you can also deduct 20 percent of the costs for energy-efficient renovations from your taxes (like insulation, new windows, new heating systems, or digital energy management), up to a value of €40,000 over three years.

If you do claim, remember to keep all invoices and proof of payment for at least two years in case the tax office asks to see them.

Private individuals should also hang on to the tax assessment notices they receive from the tax office for at least then years, in the event of subsequent inquiries or subsidy applications.