Meanings of Retention Periods Part III

Commercial and business letters

A retention period of six years applies to commercial and business letters. An exception are documents that are kept in an open item accounting, because they have to be kept for ten years. Invoices and duplicates of invoices are also considered commercial letters, for it holds a ten-year retention period.

Tax documents

According to PSYKNOWHOW.COM, a retention period of 6 years applies to tax documents. This includes, for example, your travel expense reports and logbooks, but also certificates of exemption and working time lists.

Personnel records

Regarding retention periods for personnel documents, it is relevant whether they are relevant for taxation. In this case, they must be kept for six years. Payroll accounts and other documents that are relevant for payroll accounting are used for taxation purposes, as wage tax deductions are calculated and must be paid to the tax office. Payrolls are drawn up in many companies. They list the wages for each employee and break them down in columns according to gross wages, wage tax, church tax, solidarity surcharge, social security contributions and net wages. In the financial accounting only the sums of these columns are recorded. These documents form an important basis for financial accounting and should be kept for ten years.

Regulation for other business documents

Documents or other papers that allow insight into business transactions are considered other business documents. You can explain typical and atypical business transactions. Such other business documents can be contracts, protocols, freight documents, customs documents, order slips, delivery notes, credit documents, receipts, insurance documents, hourly and piecework slips, receipts, receipts, receipts, claims documents, payrolls. In addition, the storage of invoices is specially regulated. Accordingly, entrepreneurs must keep a duplicate of the invoices that they or a third party issued. In addition, all invoices that the entrepreneur has received must also be kept.

What retention periods apply to private individuals?

Private individuals also have to observe different deadlines for their documents. Here, too, you have to take into account different periods of 2.5, 6 and 30 years up to lifelong retention. Here are a few examples:

Retention period: 2 years

You are probably familiar with the two-year period from your everyday purchases of household items, for example. All sales contracts, invoices and receipts must be kept for warranty or possible exchanges. It is particularly important when it comes to tradesman’s invoices or contracts and invoices from appraisers, lawyers or notaries.

Retention period: 3 years

There are no regulations for this, but it is advisable to keep your bank statements and bank records for 3 years. If you have used a bank statement for your tax as evidence, you must of course keep it for more than 10 years.

Retention period: 5 years

This deadline is very important to you if you have bought or built a home. Because of the deadlines for complaints and claims for defects, you have to keep all relevant invoices and documents for 5 years.

Retention period: 6 years

According to § 147a AO (tax code), all taxpayers with an annual turnover of more than 600,000 euros per calendar year must keep their documents for 6 years. As a private person, you are also affected if you are among the high earners.

Retention period: 30 years

Hopefully, this deadline is seldom relevant for you, because it affects unpleasant documents such as payment orders and trial files as well as the resulting judgments.

Lifelong retention:

Lifelong retention is particularly important for your personal documents such as birth and death certificates. But also baptism certificates, marriage certificates, school reports and pension insurance documents or important medical reports.

When do retention periods begin and end?

The beginning and end of retention periods are specified in the Commercial Code and the Tax Code. The retention period begins at the end of the calendar year in which a receipt was created. It ends at the end of the calendar year in which it expires. It is not a question of possibly deviating fiscal and financial years, but always of the calendar year. A retention period begins, depending on the type of document, at the end of the calendar year in which

the last entry was made in the trading book
an inventory has been drawn up
an opening balance sheet or an annual balance sheet has been drawn up
either individual or consolidated financial statements have been prepared
a commercial letter has been sent or received
a booking voucher has been created
other business documents have arisen
an invoice was written
an invoice has been received
the last registered wage payment was made

If a retention period according to the legal regulations has expired or is about to expire, it does not expire if the documents are still required for taxes whose assessment period has not yet expired. The deadline does not expire even if important reviews are in progress or the documents are still required for other important incidents, such as legal proceedings.