Retention Periods and Obligations for Business Records: What You Should Know as an Entrepreneur

1. Introduction

Business records must be retained according to both tax law and commercial law. The duration of retention depends on the type of documents. In this article, you will learn which regulations apply, which documents must be retained, and what you should pay attention to. The principles of proper accounting are essential in this regard.

2. Retention Periods

As an entrepreneur, you must retain almost all business documents for at least six years. Some documents even require eight or ten-year retention periods. It is important to know which documents can be destroyed after which period. For example, financial statements and tax returns are among the documents that must be retained for specific periods.

2.1 General Business Documents

- Financial statements such as annual accounts and profit and loss statements

- Accounting vouchers such as invoices and bank statements

- Payroll and salary documents

- Internal business records

- Procedural documentation

2.2 Social Security Documents

As an employer, you must maintain payroll records and contribution proofs. These must be properly retained until the end of the year following the last audit by the pension insurance provider.

2.3 Profession-Specific Documents

Different professions have specific retention obligations. For example, doctors must retain medical records and other medical documentation for ten years. Notaries, in turn, have extensive retention obligations for certain documents.

3. Start of the Retention Period

The period for retaining your business records begins at the end of the year in which the last entries were made. It is important to know these deadlines precisely to avoid mistakes that could have consequences.

4. Form of Retention

There are specific requirements for the retention of business records. The documents must be secure and can be retained in both paper and electronic form. Proper storage and archiving are crucial to meet the requirements.

4.1 Storage Location

The business documents must be protected from external influences and be able to be reviewed by an expert third party. The readability of the documents and data carriers must also be ensured throughout the entire retention period.

4.2 Retention in Electronic Form

Specific requirements apply to electronically stored documents. A procedural documentation for the digitization and electronic retention of records is crucial to comply with legal requirements.

4.3 The Right Storage Medium

The legislator does not prescribe any specific technology or storage media that must be used. However, certain points must be considered when archiving digital documents to meet the requirements.

5. Formation of Provisions

When retaining business records, you must create a provision for uncertain liabilities. This is relevant for the expected costs associated with the retention of documents.

For further questions or more detailed information, we are happy to assist you. It is important to correctly observe the retention periods and obligations to meet legal requirements.