The Federal Cabinet has finally adopted a draft bill on shortening the statutory tax retention periods. The bill, in particular, provides for a reduction of retention periods (see News Q1, Winterzeit Steffen & Partner) as a relief measure for citizens and businesses.
Frequently asked questions
Frequently asked questions
What does the draft bill of 10 April 2013 propose regarding tax retention periods?
On 10 April 2013, the German Federal Cabinet adopted a draft bill aimed at shortening the statutory retention periods under tax law. The objective is to relieve citizens and businesses by reducing the effort required for archiving receipts and records.
What are the general tax retention periods in Germany?
Under § 147 AO, German tax law generally requires retention periods of 10 years for accounting vouchers, annual financial statements, inventories, and bookkeeping records, and 6 years for commercial and business correspondence. The periods begin at the end of the calendar year in which the documents were created.
Why was a shortening of the retention periods pursued?
The reduction is intended to cut red tape and provide financial and organizational relief, particularly for businesses. Storing extensive paper and data archives generates significant costs, which shorter retention periods aim to reduce.
Should companies immediately discard records based on the draft legislation?
No, premature disposal is not advisable as long as the law has not been finally adopted and entered into force. Until then, the existing retention periods continue to apply unchanged, and destroying records too early can have tax and commercial law consequences.