E-balance sheet - tips for electronic transmission to the tax office

For reporting companies in Germany, the submission of the E-Balance Sheet is mandatory. For the tax office, this means a simplified plausibility check and automatic data reconciliation.

In general, it is an electronic transmission of the balance sheet data of a company. Of course, certain rules have to be observed to avoid further inquiries. What is an e-balance sheet? What are the guidelines for the e-balance sheet? And how do you transmit the e-balance sheet online to the tax office?

This is what you can expect today:

Duty to submit the balance sheet electronically
Overview taxonomies e-balance sheet
Avoid queries about the e-balance sheet
Hardship case regulations
E-Balance sheet with the tax consultant
What happens if the e-balance sheet is not submitted?
Conclusion

Obligation to transmit the balance sheet electronically

Who has to submit an e-balance sheet online? All companies in Germany that prepare financial statements must submit their balance sheet data electronically to the tax office. This has applied since 2013. All other companies are not obliged to do so. These include the following entrepreneurs from various industries:

farmers and foresters who voluntarily prepare balance sheets or are obliged to keep accounts under the German Fiscal Code.
freelancers, who voluntarily prepare balance sheets.
businessmen according to the German Commercial Code
traders who are obliged to prepare balance sheets according to the German Fiscal Code or who voluntarily prepare balance sheets.

Anyone who gives up or sells his business must prepare a so-called given-up balance sheet. This is also obligatory if you have so far only determined your profit by means of a revenue-surplus calculation, in short EÜR. Here you also have to make an electronic transmission which is accepted by the tax office. When founding your company, the obligation to prepare an e-balance sheet also applies. Here you have to create a so-called opening balance sheet. And also if you change the way your company determines its profit, for example, if you change from EÜR to accounting.

The e-balance sheet during the tax audit

First and foremost, the e-balance sheet has the purpose of reducing the administrative burden for auditors. The available data can thus be evaluated at the push of a button during a tax audit and provide more precise information about the company. Thus "unnecessary" audits are avoided and black sheep are found.

Taxonomy definition: What data is in the e-balance sheet?

What must be transmitted online for e-balance sheet? There are a number of minimum data which have been defined by the tax authorities and which you must transmit. This is a special data scheme, especially for balance sheets and profit and loss accounts (P&L). These schemes are also called taxonomy. It is important to note that the data to be transmitted is changed annually and usually extended. It is therefore not at all easy to create an e-balance sheet. The changes are made by the Federal Ministry of Finance.

Does the e-balance sheet comply with the Data Protection Ordinance?

Entrepreneurs are rightly concerned about the electronic transmission of sensitive data. However, the data from the e-balance sheet is subject to tax secrecy. This means that the transmitted data may only be viewed by the tax authorities. Other companies cannot view the e-balance sheet to the tax office, as is the case with the Federal Gazette. Due to encrypted data transmission and storage, the e-balance sheet is therefore considered secure. For the time being it was even considered that companies should upload their e-balance sheet on a portal. However, the Federal Ministry of Finance decided against this method because of data protection.

However, the e-balance sheet must also be deposited with the Federal Gazette. However, this is done by the company itself or by the tax consultant, not by the tax office.

The e-balance sheet is stored in the central office of the tax authorities. There is a version control, which also displays corrected versions of the balance sheet. So it is possible to correct a sent e-balance sheet afterward, should you find errors.

Overview Taxonomies E-Balance Sheet

In the dataset, you will find a master data module and a year-end closing module. In the master data, information about the company itself is given. Examples from the master data module of the e-balance sheet:

Legal form
The address of the company
Tax number
Current fiscal year
Shareholders Number and dates
Company identification number

In fact, there are many other fields that you have to fill in as conscientiously and correctly as possible. In the annual accounts module, you will find fields that are important for the balance sheet. Among other things, the following elements are mandatory:

Standardized or commercial balance sheet including reconciliation statement or tax balance sheet
Profit and loss account (P&L)
Appropriation of earnings
Investment deduction amount (mandatory since 2018)
Capital account development for partnerships or similar
Sole proprietorships and partnerships provide the taxable profit calculation

Avoid queries about the e-balance sheet

In addition to the mandatory data for the tax office, there are also other data fields that you can fill involuntarily. And this might even be useful under certain circumstances. Especially if you already suspect that the tax office is making inquiries. In order to avoid further inquiries, you can do some clarification work.

For example, you could enclose account statements or a statement of assets. Even if you have unusually high amounts on the balance sheet, you could provide additional information that explains these figures. However, you do not have to provide voluntary information electronically. You can also send them by mail to the person in charge at the tax office if this seems easier to you. Voluntary report components could still be:

Management report
Cash flow statement
Contingent liabilities
Shareholders' resolutions
Supervisory Board reports
Equity capital statement

Hardship provisions

The electronic transmission specifications are constantly changing and are constantly updated. This represents an enormous time and workload for computerized accounting. However, time and money are not always the means available to a company in masses. So what if the conversion to the new requirements does not work out directly? Fortunately, the law provides a hardship clause for such cases. So you can file an application with the tax office. In it, you ask the tax office to waive the electronic transmission of balance sheet data. However, this will only be approved if there is real undue hardship. In other words, if the transmission of the data is not reasonable for you from an economic or personal point of view.

Applications for hardship cases must therefore be justified. After all, the tax office can only carry out its conspicuousness checks within a short time if an electronic data transfer is involved.

E-balance sheet with the tax consultant

Tax consultants are indispensable for complex accounting. They check the balance sheet data and give their okay for the transmission to the tax office. It is recommended, however, to compare the annual charts of accounts with the respective specifications of the tax authorities and to discuss them with the tax consultant. This saves a lot of time in preparation. But how does it go on now?

If you are not able to carry out the accounting conversion work due to lack of time or lack of expertise, you should think about outsourcing the accounting. This can be particularly useful in the start-up phase. The company can concentrate on its core business while the tax consultant takes care of the accounting. This costs money but is worth it.

Also, support your tax consultant with certain control tasks. This is also especially important in the start-up phase of a company and can prevent errors. Also take care of the training of the staff, because they also have to deal with the legal requirements for e-balancing. Up to now, employees have normally only been dealt with bookings under commercial law.

Now, however, many of them are also responsible for making adjustments to comply with tax regulations.

What happens if the e-balance sheet is not submitted?

If an e-balance sheet is not submitted, the tax office can set a compulsory allowance. This happens even if the balance sheet was submitted by mail in paper form. This form is no longer accepted since 2013 and the tax office is entitled to consider this as non-fee. Anyone who cannot submit their e-balance sheet for personal or economic reasons must submit an application for a hardship case. However, if the reasons stated therein are not within the scope of unreasonable hardship, the application can be rejected.

Conclusion

The e-balance sheet updates annually and at regular intervals the regulations for dispensing an electronic balance sheet. The schemes that companies must follow are called taxonomy. Anyone who is unable to comply with these regulations and is required to submit a balance sheet due to their obligation to prepare a balance sheet may submit an application for a hardship case. It is definitely advisable to consult a tax consultant at this point. The paper form for the balance sheet has not been accepted since 2013 so that companies cannot avoid submitting the electronic balance sheet to the tax office.