If you don’t know the German tax system and would like to delegate the tax accounting, this article might be useful for you
Im Jahr 2008 – frischgebackener Einzelunternehmer
In this article I would like to tell my personal story. First of all I’ll reveal a secret – only in 2017, eight years after I launched my company, I seriously started to learn and understand the German tax system. From the launch in 2008 until 2016 I could hardly distinguish income tax from sales tax.
My first tax consultant was an average tax professional recommended by a friendly German businessman. I came to the office of that tax consultant personally and wanted to submit some documents right away. This was done quickly and we began a friendly conversation. I remember asking him a few questions about the principles of my taxation.
I asked this question as a curiosity but also as a politeness in order to “fill a break”. The tax consultant explained everything to me in a simple and friendly manner. It sounded like conversation between two good friends. His explanations seemed so easy to understand that I didn’t take any notes. However, all the material was too new and abstract for me. When I arrived home, most of the explanations were forgotten again.
A week later, when I was abroad, I decided to answer one of his questions by phone, not by email. After the details of the business had been clarified, I informed the tax consultant that I was in Turkey now. Since we were both interested in Sufism, we talked about Turkish Sufi masters for another hour.
After the end of the month I got his invoice and couldn’t believe my eyes – the tax consultant charged me for the two talks, this “friendly conversation”! Besides I had to pay him a nice sum for a full two hours of his work.
That was really a shock! I changed this bandit as soon as possible.
I found another tax consultant over a friend. The new tax consultant asked me how many invoices I issue per quarter. Then he suggested a all-inclusive sum: I pay a fixed sum for each quarter and he makes the advance tax payments and the annual report. I immediately liked the idea of the fixed sum. I told him that we would try to work together for a year. After all, I worked with this guy for the next few years.
A tax adviser could tell you that all-inclusive deals are difficult to manage because the number of invoices can vary. Say that within the first year you plan to issue a maximum of so many (say 1-5 invoices) in an average month. So try to reach a fixed sum agreement at least for the first year. After that, a lot of things will clear up on their own.
Your tax advisor may not like to run all the communication via email because some of the questions “can be answered very quickly by phone”. That may be true. But remember that written communication gives you a full overview and control of what was said, answered and promised. Phone calls can be more easily misunderstood and some agreements can be forgotten or ignored.
If you follow advices above, you don’t need to worry about the German tax system.