A key component of the tax assessment process is the e-balance sheet. Among other things, it refers to the electronic submission of the balance sheet and profit and loss account to the tax authorities.

The Challenge of Digitalisation

Digitalisation is, and remains, one of the major challenges of our time. Digitalisation – and the associated modernisation of public administration – also extends to the taxation process. This has required, and continues to require, a wide range of measures. One successful example is the e-balance sheet.

Legal basis The Income Tax Act sets out the requirement for the electronic submission of balance sheets. Since then, the contents of the balance sheet and the profit and loss account have had to be submitted electronically as supporting documents for the tax return. The legislature regards the electronic submission of tax profit calculations and the associated standardisation of balance sheet content as a measure that constitutes a key component of the overall strategy for modernising the taxation process.

Following the entry into force of a regulation, the obligation to submit e-balance sheets applied from the 2012 financial year onwards. Despite this obligation to submit documents electronically, the tax authorities initially did not object if balance sheets continued to be submitted in paper form. This was intended to facilitate the transition to electronic submission. These transitional provisions have since expired. Since then, the number of e-balance sheets received has been rising steadily. Whilst around 1 million e-balance sheet records were submitted nationwide in 2014, this figure had risen to around 2.5 million by 2017. The figures show that the introductory phase has been successfully completed. However, the e-balance sheet project as such is far from over.

CTA Box E-Balance Sheet

Requirements for the e-balance sheet

The creation of a standard is a prerequisite for electronic transmission, linked to the aim of seamless preparation and further processing. The basis for such a standard is substantive law – in the case of the e-balance sheet, specifically the tax law governing balance sheets. The standardisation of the balance sheet and the profit and loss account presents a particular challenge due to their individual nature and complexity. In 2010, the Federal Ministry of Finance stipulated that the XBRL format should be used as the technical transmission standard. Data exchange in the XBRL format is based on so-called taxonomies. These are hierarchically structured data schemas. The updated data schema for the taxonomies used to submit the e-balance sheet is published annually.

With the Taxonomy software Opti.Tax Accounting-related taxonomies are visualised and made easy for users to capture through subject-matter-based input aids and detailed views. The data can then be transmitted electronically to various recipients via integrated interfaces, in accordance with the XBRL standard.

Further information on the subject of e-balance sheets can be found here. You can also use our XBRL.App Tax advisers and auditors can undertake projects for the Opti.Tax taxonomy software edit on your mobile and in our Webinars See how Opti.Tax can help you get your e-balance sheet ready to send in no time at all.