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Blog post from August 27, 2021

Retention periods: How long do I have to keep invoices? 

Retention periods for invoices

Retention periods for invoices, account statements, etc. – this is how private individuals and entrepreneurs deal with the retention obligation

Mountains of paper are piling up and some people no longer know where to put the mountains of paper. However, you are legally obliged to retain documents. For many people, the retention requirement is a closed book.

It applies to entrepreneurs and private individuals and is indispensable in the context of digitalization. There are a few things to consider in order to have the right answer to requests for information in the future.

To whom do the retention periods for invoices apply?

The law provides for an obligation to retain a wide range of documents for both private individuals and entrepreneurs. This particularly includes invoices and account statements. But tax documents can also have legal relevance for years to come.

Entrepreneurs are obliged to deal with the principles of proper accounting. At the end of the year, they have the company's annual financial statements based on accounting. This overview explains to whom which retention period applies and what it entails.

What is meant by the retention obligation?

The term refers to the obligation to store documents until a certain period of time, which is regulated differently by law for different types of documents. The obligation is intended to ensure subsequent documentation in the sense of verifiability.

Companies in particular are closely scrutinized so that they have to report to external institutions about their business, transactions and economic situation. But private individuals also have to keep certain documents for a certain period of time.

Which retention period regulations apply to private individuals?

Employees are generally not obliged to keep their employment contracts or pay slips. Payments made to statutory social insurance and receipts for unemployment or sickness benefits are also not provided for in the legal regulations.

However, it is advisable to keep all these documents until you retire.

Those who do not do so may suffer disadvantages when it comes to claiming pension rights. The documents mentioned are also relevant for any applications.

Retention periods for invoices

Throwing away bank statements is tempting for individuals. However, this should not happen until the statute of limitations for claims becomes relevant and claims can be defended using the statute of limitations notice.

If the last booking was made three full calendar years ago or more, account statements can be destroyed. Anyone who disposes of waste earlier runs the risk of not being able to provide proof of payments made.

 Taxable services must be § 14 b Paragraph 1 Sentence 5 No. 1 UStG can be taken for two years. Invoices from private individuals must be kept for the same length of time.

The background is the fight against undeclared work by the legislature. The retention period begins at the end of one year in which the respective document was created.

This plays a role in craft services Warranty a major role. Therefore, invoices for craftsman services should be kept for five years. If the purchase involves a large financial equivalent, it is advisable to store it beyond the statutory period. In this way, ownership can be proven to the household contents insurance company if there is major damage.

There is a four-year deadline for tax documents, up to which the tax authorities can request receipts. If the gross income is more than 500,000 euros, the deadline exceeds four years.

You should never throw away documents such as your birth certificate or family register. But marriage, divorce and death certificates of relatives are also of fundamental importance. You should also keep your school and work references for the rest of your life.

Which retention period requirements are relevant for companies?

Companies have tax and commercial law obligations for recording and accounting. Documents relevant to tax law must be kept for between six and ten years. In the § 147 AO (Tax Code) and § 14 b UStG (Sales Tax Act) It is enshrined that entrepreneurs must keep outgoing and incoming invoices for a period of ten years.

Here too, the retention period begins at the end of the accounting calendar year. If the tax assessment is made according to § 165 AO is not yet final, but has initially been determined provisionally, invoices must be kept for longer than ten years. Since the tax authorities can carry out an external audit, the invoices must be able to be presented upon request.

What problem do paper receipts cause and how can digital storage help?

For example, if an audit is ordered by the tax office, an entrepreneur must be able to present legible documents. With paper receipts made of thermal paper, this may no longer be possible after a short time - they fade quickly.

While thermal paper receipts were copied in the past, today it is advisable to digitize them. This saves a lot of paper and is good for the environment. But you can also get a possible space problem under control by digitizing documents.

By the way, with our free scanning app for iOS and Android you can digitize paper receipts including all invoice details in just a few seconds and store them in your GetMyInvoices account.

DANGER! Companies must submit their annual financial statements, an opening balance sheet and documents according to the date of Union Customs Code defined Article 15 paragraph 1 and Article 163 submit it in writing in paper form.

Invoices or delivery notes are sufficient in digital form. This must comply with the GoBD (principles for proper accounting), meaning it must be unchangeable and match the original.

Conclusion

If you are absolutely unsure about the various legal requirements, it is better to keep paper receipts. If you can provide proof of invoices, tax documents or bank statements in case of doubt, you will avoid possible disadvantages.

Meet all retention periods with GetMyInvoices.

See for yourself now for 14 days free of charge and without risk.

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