Doing Business in Germany Part IV

Today we ‘ll discuss three German requirements that require specially designed localized solutions.

Step #7: Make sure your accounting package can handle the following:

• GDPdU: Known in German as Grundsaetze zum Datenzugriff und zur Pruefbarkeit digitaler Unterlagen, GdpdU is an electronic transfer of accounting data for tax audits. The German tax administration now requires the submission of electronic accounting data for tax audits. GdpdU should speed up and facilitate tax audits for U.S. companies operating in Germany. GdpdU makes it faster to find mistakes. You need an accounting package with an integrated GdpdU solution.
• Elster: Known in German as Elektronische Steuererklaerung, Elster is the electronic transmission of VAT declaration to the tax administration. Look for accounting packages that have an Elster component.
• Local payment files: There is a data standard for German banks called DTAUS (domestic payments) and DTAZV (foreign payments). They currently use this standard for transmission of payment files. In near future DTAZV should be replaced by Single Euro Payments Area (SEPA) as long as European payments are executed. If U.S. payments are executed, DTAZV remains in place.

Step #8: Find out if your accounting package can handle E-Balance (electronic transmission of balance and P&L data known in German as e-Bilanz). E-Balance is the electronic submission of the balance and P&L data to the tax administration. This is new a requirement for 2012, which needs to be submitted in 2013). The new E-Balance standardizes some reporting lines for local transmission, defined by local GAAP. On an account level, companies are free to use whatever works for you in your chart of accounts. However, you need to remap your accounts to ensure they work with E-Balance requirements. To be able to transmit in 2014, you need to start booking in the right way. (There is a one-year grace period in which you can still file on paper and won ‘t be fined. However, by 2014, you need to submit electronically.) Coda Financials does have an E-Balance solution available, but most other solutions do not yet have a solution. Make sure to ask when your provider will have a solution ready; if it ‘s after Q4 2012, it may be worth switching to another system.

We’ll wrap up tomorrow.