Definition and Legal Classification of Bookkeepers
The Term Bookkeeper in Germany refers to a person who is tasked with the ongoing recording of all business transactions of a company, association, or natural person. The activity of a bookkeeper primarily comprises maintaining the accounts, i.e., systematically recording, organizing, and evaluating business transactions in accordance with statutory provisions. The bookkeeper plays a central role in fulfilling tax and commercial bookkeeping obligations.
Areas of Activity and Distinction
Bookkeeping under the German Commercial Code (HGB) and Tax Law
Within the scope of bookkeeping, German law distinguishes between Commercial bookkeeping according to the German Commercial Code (HGB) and the statutory bookkeeping obligations under the Fiscal Code (AO) or individual tax laws. Bookkeepers are employed in every type of company structure and support both companies required to prepare balance sheets and those not required to do so (e.g., income-surplus calculators).
Distinction from Tax Advisors and Auditors
The term bookkeeper is not legally equivalent to the regulated professional titles of tax advisor or auditor. While tax advisors and auditors are authorized to perform reserved activities (e.g., tax consulting, preparation of annual financial statements for publication), the activities of bookkeepers in Germany are regulated by Section 6 Nos. 3 and 4 of the Tax Consultancy Act (StBerG) and are limited to the ongoing payroll and financial bookkeeping as well as related services.
Statutory Restrictions
The following activities are not permitted for bookkeepers and would constitute unauthorized tax advice, such as:
- Advice on tax matters
- Preparation of tax returns (except for payroll tax notifications)
- Preparation of balance sheets and annual accounts for third parties
Violations of these boundaries may be regarded as unauthorized assistance in tax matters and prosecuted under the Tax Consultancy Act.
Legal Status of the Bookkeeper
Admission and Qualification
The term “bookkeeper” is not legally protected in Germany. There is no requirement for a license or mandatory qualification for the exercise of this occupation. Bookkeepers may work as freelancers, self-employed, or as employees. However, self-employed bookkeepers are subject to the provisions of the Tax Consultancy Act as well as the commercial and tax law requirements for proper bookkeeping.
Duties in Practice
Key statutory foundations to which a bookkeeper is bound include:
- Sections 238 et seq. HGB (Obligations for commercial bookkeeping): Scope and principles of proper bookkeeping for merchants are governed.
- Sections 140, 141 AO (Statutory bookkeeping obligations): Defines bookkeeping and record-keeping obligations from a tax perspective.
- Section 6 Nos. 3 and 4 StBerG (Restriction of bookkeeping authorizations): Regulation of permitted activities.
When processing personal data, the provisions of the General Data Protection Regulation (GDPR) must also be observed.
Duty of Confidentiality
Bookkeepers are subject to a duty of confidentiality towards third parties according to contractual agreements and business secrets regulations. For employed bookkeepers, such obligations usually arise from the employment contract and the Act on the Protection of Trade Secrets (GeschGehG).
Liability
Bookkeepers are generally liable for errors they cause, e.g., incorrect recording of transactions or violation of retention obligations. Liability depends on the scope of tasks assumed and may extend to damage claims by the client.
Permitted Services and Scope
According to the Tax Consultancy Act, bookkeepers may provide the following services in bookkeeping in particular:
- Ongoing recording of business transactions (financial bookkeeping)
- Preparation of payroll and salary statements and ongoing payroll tax notifications
- Classification and posting of documents
- Ongoing monitoring of payment transactions
- Support in preparing VAT advance notifications (without tax advice)
Preparation of tax returns, annual accounts, or so-called audit-related activities is not permitted.
Bookkeeper as a Profession in International Comparison
Germany
In Germany, there are various training and continuing education paths for bookkeepers, including the qualification as a “Certified Bookkeeper (IHK).” However, the job title is not protected.
Austria
In Austria, the bookkeeping profession is also regulated. ‘Balance bookkeepers’ are self-employed individuals officially certified by the state, whose professional profile is legally regulated (e.g., BibuG).
Switzerland
In Switzerland, activities in the area of bookkeeping are performed by individuals with various qualifications and professional titles, such as specialist in finance and accounting with a federal certificate.
Liability and Responsibility
Responsibility Towards Third Parties
Bookkeepers bear a special responsibility for the proper and timely bookkeeping. Errors can give rise not only to civil liability claims but, under certain circumstances, also to tax or criminal consequences for the business or the client.
Tortious Liability and Limitation of Liability
In the context of self-employment, liability can be limited through individual contract design; it is particularly recommended to cover risks through professional indemnity insurance.
Retention Obligations and Data Protection
Recording Obligations
Bookkeepers are required to comply with the principles of proper bookkeeping (GoB). This includes in particular:
- Proper filing and organization of documents
- Complete and traceable documentation of all business transactions
- Timely retention of all relevant records (generally 10 years according to Section 257 HGB and Section 147 AO)
Data Protection
When handling employee data (payroll), compliance with data protection laws, in particular the GDPR, is mandatory.
Summary
The bookkeeper is a central authority in business accounting, whose activities are fundamentally shaped by commercial and tax law as well as the Tax Consultancy Act. Despite the lack of protection of the professional title, the scope and nature of permitted activities are clearly defined by law. Compliance with these requirements is crucial for legal certainty and avoiding liability.
Frequently Asked Questions
May a bookkeeper work independently for clients?
A bookkeeper is generally permitted to be self-employed and to assume bookkeeping tasks for clients. However, this is subject to strict legal limitations. The key regulation is the Tax Consultancy Act (StBerG). According to this law, so-called ‘assistants in tax matters’ such as bookkeepers may only perform limited activities: they may, on behalf of third parties, perform ongoing payroll and salary statements as well as ongoing financial bookkeeping (§ 6 Nos. 3 and 4 StBerG). The preparation of annual accounts, tax returns, or representation before tax authorities, however, is reserved solely for tax advisors, auditors, and certified accountants. A violation may constitute unauthorized assistance in tax matters, carrying criminal and civil consequences. Bookkeepers are also required to properly register their business with the relevant trade office.
What legal requirements must a bookkeeper meet in Germany?
Bookkeepers do not require a special government permit or qualification for professionally independent activity, but the restrictions described above pursuant to the Tax Consultancy Act apply. For working as an ‘external bookkeeper’, a business registration under Section 14 Trade Regulation Act (GewO) is required. Those entrusted with payroll and salary tasks must also observe the Social Security Code and data protection regulations. For employees, duties are determined by the employment contract and management rights; in this case, the provisions of the German Commercial Code (HGB), and where applicable the Penal Code (StGB) in cases of breaches such as embezzlement (§ 266 StGB), apply.
What liability risks exist for bookkeepers?
Bookkeepers, like other service providers, are liable for damage caused by errors in their work. For employees, liability is determined based on the so-called internal damage settlement – in cases of negligence, this is usually limited. Self-employed bookkeepers are personally liable for errors, for instance in the case of incorrect entries or missed deadlines. Liability includes civil claims such as compensation for damages and, if applicable, recourse claims by the client. Professional indemnity insurance is therefore highly recommended, although not legally required. Unauthorized tax advice also carries the risk of criminal prosecution (§ 160 German Penal Code).
Which tasks is a bookkeeper legally prohibited from taking on?
A bookkeeper is particularly prohibited from performing reserved activities which are exclusively for tax advisory professions. These include: preparation of tax returns, annual accounts, balance sheets, legal advice in tax matters, and representing clients before tax authorities. Advising on tax structuring, providing information on the tax effects of specific transactions, and interpreting legal provisions are also forbidden. Violations are prosecuted as unauthorized assistance in tax matters (§ 160 StBerG) and result in civil as well as criminal consequences.
What are the obligations of a bookkeeper regarding data protection and confidentiality?
A bookkeeper is obliged to comply with strict data protection standards. The EU General Data Protection Regulation (GDPR) and the German Federal Data Protection Act (BDSG) require bookkeepers to maintain the confidentiality and security of their clients’ personal data. This includes securing physical and digital data as well as restricting access to necessary persons only. In the event of data breaches, there is an obligation to notify the data protection authority. For self-employed bookkeepers, there is an additional duty of confidentiality regarding their clients’ business and trade secrets, which derives from the service contract under civil law.
What are the consequences of violating the Tax Consultancy Act for bookkeepers?
If a bookkeeper violates the Tax Consultancy Act – for example, through unauthorized assistance in tax matters – criminal and civil consequences may result. The law prescribes prison sentences of up to one year or fines for such cases (§ 160 StBerG). Civil law may give rise to recourse claims by clients, for example, if tax disadvantages have arisen due to erroneous advice. Such a violation can also result in the withdrawal of the business license. Furthermore, there may be warnings under competition law from competitors or chambers. In serious cases, the violation is recorded in the Central Trade Register.
Are bookkeepers required to provide ongoing evidence of continuing education?
There is no statutory requirement for salaried bookkeepers to undertake regular continuing education, but it is strongly recommended, as legal situations, especially in tax and commercial law, are constantly changing. Self-employed bookkeepers are not subject to a mandatory continuing education requirement, but should keep their expertise current to avoid errors and the resulting liability risks. Professional associations such as the Bundesverband der Bilanzbuchhalter und Controller e.V. (BVBC) offer appropriate courses and expect regular further training from their members. For activities close to the boundary of tax consultancy, training in the distinction of permitted activities should be attended.
