The Income-Surplus Calculation (EÜR), or Einnahmen-Überschuss-Rechnung in German, is a fundamental aspect of financial reporting and bookkeeping for many entrepreneurs in Germany. While it serves as a simplified method for determining profit, it can often present a challenge for self-employed individuals, freelancers, and small business owners, especially those with limited accounting knowledge. Fortunately, utilizing a free EÜR template or Excel sample can significantly ease this process and streamline bookkeeping efforts. This guide provides a comprehensive overview of the EÜR, its requirements, benefits, and how to effectively use a template for your business.
What is the EÜR?
The EÜR serves as a straightforward method for entrepreneurs to calculate their profits. It is mandatory for small and medium-sized enterprises (SMEs) and freelancers who are not required to maintain double-entry bookkeeping. The EÜR is based on Section 4, Paragraph 3 of the German Income Tax Act (EStG), hence its alternative name, the “473 calculation.”
The law permits the use of the EÜR for profit determination when a taxpayer is not obligated to regularly submit financial statements. Whether an EÜR is permissible or double-entry bookkeeping is required depends on the company’s legal structure and its generated revenues and profits. Generally, you are required to prepare and submit the EÜR form online via the German tax authority’s ELSTER portal. ELSTER offers a dedicated form where you can input your income and expenses, ultimately declaring your profit or loss.
Tip: Consider using accounting software that can assist in the EÜR preparation. Such software can automatically calculate your EÜR based on your recorded income and expenses, and often allows for direct transfer to your tax advisor for review and final submission through ELSTER.
Understanding the Cash Basis Principle in EÜR
The cash basis principle (Zufluss- und Abflussprinzip) is crucial for the EÜR. To accurately report your annual profit, you must account for all business income and expenses that have actually flowed in or out during the relevant tax year.
In the EÜR template, only amounts that have been truly received or spent by your business are recorded. Actual income represents inflows, and expenses represent outflows. This principle applies to amounts received or paid in cash or via cashless transactions. All transactions must be considered within a single business year. This means you only record the actual amounts that have entered or left your bank account or cash register – this is the essence of the cash basis principle.
Who Must Create an EÜR?
At the end of each year, businesses must either prepare a balance sheet or an EÜR. The method of profit determination, as regulated by Section 4 (3) EStG, is dictated by the company’s legal form. The following table provides a clear overview of which legal structures are typically required to use the EÜR versus double-entry bookkeeping:
| Legal Structure | EÜR (Simple Bookkeeping) | P&L & Balance Sheet (Double-Entry Bookkeeping) |
|---|---|---|
| Sole Proprietorships | ||
| Freelancers | Yes | No |
| Small Business Owners | Yes | Yes, if the predefined thresholds (annual profit of €80,000 or annual turnover of €800,000) are exceeded. |
| Registered Merchants | Yes | Yes, if the predefined thresholds are exceeded. |
| Partnerships | ||
| GbR (Civil Law Partnership) | Yes | Yes, if the predefined thresholds are exceeded. Exceeding these thresholds can convert a GbR into an OHG. |
| Partnergesellschaft | Yes | No |
| OHG (General Partnership) | No | Yes |
| KG (Limited Partnership) | No | Yes |
| GmbH & Co. KG | No | Yes |
| Corporations | ||
| GmbH (Limited Liability Company) | No | Yes |
| GgmbH or gUG | No | Yes |
| UG (Entrepreneurial Company) | No | Yes |
| AG (Stock Corporation) | No | Yes |
| KGaA (Partnership Limited by Shares) | No | Yes |
Advantages of Using an EÜR Template
For entrepreneurs who are not required to prepare a full balance sheet and only need to complete an EÜR, utilizing a free EÜR sample offers several benefits. While it’s possible to prepare an EÜR manually, this process can be time-consuming and prone to errors, with the risk of overlooking crucial details. An EÜR template, however, mitigates these risks and ensures completeness. Additional advantages include:
- Time Savings: An EÜR template allows you to dedicate more time to your core business activities.
- Cost Efficiency: By saving time, you can focus on revenue-generating tasks, leading to a cost advantage.
- Completeness: Templates ensure that all essential components of the EÜR are included, reducing the likelihood of omissions.
- Simplified Backup: Only one backup copy is generally needed, eliminating the need for complex backup systems.
- Accessibility: EÜR templates can be accessed and edited from anywhere.
- Efficiency with Excel: Individuals with basic Excel skills can work very quickly with an EÜR template.
Furthermore, an EÜR template provides valuable insights into the type and format of documentation required for your financial records. It also helps in gaining a better understanding of your company’s financial transactions.
EÜR Template for Small Business Owners
Small business owners are generally not required to attach the EÜR to their tax return unless their annual profit exceeds €17,500. However, if this threshold is surpassed, a detailed EÜR must be submitted to the tax authorities. Previously, small business owners could submit this in paper form (e.g., using an informal Excel-based profit calculation). This changed in 2017, with a transitional period in 2018 allowing paper submissions only if electronic filing posed an “unreasonable hardship.” Since 2019, all tax declarations, including necessary attachments, must be submitted electronically via ELSTER.
EÜR Retention Obligations
All business-related documents, including the EÜR, are subject to a retention period of 10 years.
Content and Structure of the EÜR
The EÜR consists of a general main section and various associated annexes. Not all annexes may be required in every case; some are specific to partnerships (e.g., supplementary and special calculations with related asset registers).
The available forms include:
- Anlage EÜR: Income-Surplus Calculation
- Anlage AVEÜR: Asset Register / Calculation of Current Assets
- ANLAGE ER: Supplementary Calculation
- ANLAGE SE: Special Calculation
- ANLAGE ABSE: Asset Register for Anlage SE
An EÜR template allows you to record business income, categorized by tax rates (7% and 19%) and tax-exempt revenues. Alongside business income, the template also addresses business expenses, differentiating between purchases of goods, personnel costs, and other expenses. Extraordinary income and expenses are treated as a separate item in the EÜR template because they do not occur regularly in the normal course of business and are typically one-off or significantly larger in scale.
Definition and Examples of Business Expenses
Business expenses (Betriebsausgaben) encompass all costs incurred for carrying out your business activities.
Key business expenses include:
- Cost of Goods Sold: Expenses related to the purchase of goods and raw materials essential for your business operations (e.g., paint and brushes for a painter, flour for a baker).
- Services: Costs for services rendered to other businesses, such as telephone and internet, repairs, or consulting fees.
- Wages and Salaries: Payments made to employees, which reduce your business’s profit.
- Rent: Costs incurred for renting business premises.
- Other Business Expenses: This category includes Value Added Tax (VAT) paid on purchases, and costs associated with a company vehicle if it’s used for business purposes more than 10% of the time.
Definition and Examples of Business Income
Business income (Betriebseinnahmen) includes all monetary and non-monetary benefits received from customers for services rendered.
Types of business income include:
- Sales of goods or services.
- Sale of fixed assets, such as machinery.
- Interest income.
- One-off and extraordinary income.
- Reimbursement of business expenses from a previous accounting period (e.g., VAT refund).
EÜR Example Structure
In its simplest form, the EÜR structure includes:
- General information about your company.
- An overview of business income.
- An overview of business expenses.
- Profit calculation.
- Reserves and hidden reserves.
- Withdrawals and contributions.
| A. Business Income | € | |
|---|---|---|
| Sales Revenue | Sales revenue with 19% VAT | 190,000 |
| Other Revenue | Drawdowns of goods with 19% VAT | 8,000 |
| Private Portion of Company Car (19%) | 2,000 | |
| Private Portion of Company Car (0%) | 5,000 | |
| Collected VAT | VAT 19% | 38,000 |
| Total Business Income | 243,000 | |
| B. Business Expenses | € | |
| Cost of Goods Sold | Purchase of goods 7% input tax | 0 |
| Purchase of goods 19% input tax | -90,000 | |
| Personnel Costs | Salaries | -40,000 |
| Statutory Social Contributions | -20,000 | |
| Other Business Expenses | Rent & Ancillary Costs | -55,000 |
| Insurances and Contributions | -4,500 | |
| Vehicle Costs | -8,080 | |
| Advertising Costs | -1,920 | |
| Maintenance Costs | -1,500 | |
| Legal and Consulting Fees | -4,000 | |
| Office Supplies, Telephone, and Postage | -2,000 | |
| Other Expenses | -3,000 | |
| Total Other Business Expenses | -80,000 | |
| Interest Expenses | -1,500 | |
| Advance Input Tax | -37,500 | |
| Total Business Expenses | -269,000 | |
| Annual Loss | -26,000 |
Using the EÜR Template with Your Tax Return
A well-designed EÜR sample requires minimal instruction. The Excel file will feature appropriate columns for all necessary entries, making it more suitable for clear bookkeeping than a Word document. With an EÜR in Excel, data can be entered quickly and calculations are often automated.
Typically, a comprehensive EÜR template does not require modifications. If you do need to customize it, prior Excel knowledge is usually necessary. To ensure accuracy, it is always advisable to discuss your completed EÜR form with your tax advisor.
The EÜR can only be submitted to the tax authorities in a printed format. Excel files themselves are not valid submission formats. However, specialized software can add an electronic watermark to documents like the EÜR, allowing for partial electronic transmission to the tax office.