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Determining profit as a self-employed person

Check whether you must keep books or whether the cash-basis income statement is enough, compute depreciation, low-value assets and the investment deduction, know your retention periods and prepayments, and file the EÜR schedule and the income tax return: 11 steps.

Start here: German bookkeeping duty and the cash-basis income statement

Understand: bookkeeping duty, cash-basis income statement, depreciation

  1. Step 1 of 11
    CoursePaid individually39 min

    German bookkeeping duty and the cash-basis income statement

    Section 141 of the Fiscal Code covers commercial traders, farmers and foresters — never the liberal professions, whatever their size. The figures of 800,000 € and 80,000 € are joined by OR, and the duty starts not when they are exceeded but with the financial year after the tax office's notification. The second module covers the cash-basis income statement and the four places where it precisely does not follow payments, together with the three registers that must be kept continuously even without books. Two modules with case studies worked on the statute itself.
  2. Step 2 of 11
    CoursePaid individually62 min

    German depreciation and the investment deduction

    Straight-line depreciation with the twelfths rule, declining-balance depreciation up to three times the straight-line rate and at most 30 percent for acquisitions between July 2025 and the end of 2027, fixed building rates of 2 to 3 percent. Plus the investment deduction of up to 50 percent before the purchase, with a profit limit and a ceiling of 200,000 € each and a three-year deadline, the 40 percent special depreciation and the 25 percent research allowance, which is paid out even in a loss year. Three modules with fully worked case studies.

Compute: bookkeeping thresholds, depreciation, low-value assets, investment deduction, retention, prepayments

  1. Step 3 of 11
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    German bookkeeping obligation — AO s. 141 and HGB s. 241a

    The two provisions carry the same amounts and do NOT count the same years. Anyone reading only s. 141 of the Fiscal Code believes they are free while the commercial-law exemption has long gone — for example because the YEAR BEFORE LAST was over the limit.
  2. Step 4 of 11
    CalculatorFree result

    German depreciation calculator — straight-line or reducing balance

    Straight-line depreciation spreads the cost evenly over the useful life. Reducing-balance depreciation may not exceed three times the straight-line rate, nor 30 % — the lower of the two limits always applies.
  3. Step 5 of 11
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    German low-value assets — immediate write-off or pooling?

    Up to EUR 800 net, an independently usable asset can be expensed immediately. Under the pooling method instead: immediate up to EUR 250, and spread over five years from EUR 250 to EUR 1,000.
  4. Step 6 of 11
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    German investment deduction under EStG s. 7g

    Two limits of EUR 200,000, two different things: one is an ENTRY CONDITION that closes the scheme altogether, the other a QUOTA across four financial years. And profit is tested BEFORE the deduction — you cannot compute your way in.
  5. Step 7 of 11
    CalculatorFree result

    German record retention periods — ten, eight or six years

    The period begins only at the END of the calendar year in which the record arose. A 2026 voucher with a ten-year period expires on 31 December 2036 — so it occupies the shelf for ELEVEN calendar years. Adding year and period and shredding on 1 January destroys the record twelve months too early.
  6. Step 8 of 11
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    German income tax prepayments — due dates and minimum amounts

    Prepayments fall due on 10 March, 10 June, 10 September and 10 December. They are set only from EUR 400 a year and EUR 100 per due date; raised only from EUR 100 per due date, or EUR 5,000 when raised after the year.

File: EÜR schedule, income tax return, adjustment of prepayments

  1. Step 9 of 11
    FormFree60 min

    German cash-basis profit computation (Anlage EÜR)

    Profit as the excess of operating receipts over operating expenses: who may use the EÜR, the limits at which the bookkeeping duty bites and why it only starts once the tax office has served notice — guide, deadlines and worked example.
  2. Step 10 of 11
    FormFree75 min

    German income tax return (ESt 1 A)

    The calendar year is what gets assessed: why the self-employed and traders MUST file electronically, when spouses file one joint return, and from when the objection period runs. Guide, deadlines and worked example.
  3. Step 11 of 11
    FormFree20 min

    Applying to adjust German advance tax instalments

    Instalments follow the LAST assessment, not the current year — and unlike a deferral or simply paying late, an adjustment costs no interest. Which deadlines apply, why trade tax goes through the municipality, and the amounts below which nothing is assessed at all. Guide and worked example.

The other paths

A different procedure, the same principle: the three pillars in order.

Read in German