Tax advice for lawyers

If you are a lawyer, you have come to the right place. We have been working for lawyers for many years. As we do not offer traditional legal advice ourselves, we are not in competition with our clients.

Both our professional secrecy and our self-image of discretion and loyalty to our clients oblige us, like lawyers, to maintain confidentiality. Here you will find some examples of our possible services for lawyers.

Examples of our activities for lawyers

Recording and posting of receipts
Preparation and electronic transmission of advance VAT returns
Preparation of the revenue surplus account or the annual financial statements
Preparation of company tax returns (separate and uniform returns, VAT returns)
Preparation of your private income tax returns (Schedule EÜR and Schedule S)
Recognition and determination of special operating expenses
Check whether outgoing invoices are issued with or without VAT and which formal requirements must be observed
Examination of the right of taxation and the possibility of offsetting taxes if income is generated abroad.

Lawyers at internationally active law firms

Lawyers who work for international law firms (e.g. a German lawyer is a partner in a US or UK LLP or LLC) often have questions about international tax law. As the remuneration is partly

Germany, partly for the lawyer’s work (salary) and partly for the shareholder position (dividend), the question must be clarified as to which country has the right to tax which income.

Which country has the right to tax which income?

In principle, anyone who has a place of residence or habitual abode in Germany is subject to unlimited tax liability here.
This means that all income, regardless of where in the world it comes from, must be declared in the German income tax return.
It does not matter whether this income has actually accrued or not (in contrast to the remittance principle in the UK, for example).

Whether this income is then subject to tax in Germany or is only included in the progression proviso and whether taxes paid abroad can be offset against German tax must then be examined separately. The decisive factor here is which country is involved and what type of income is involved.
In case of doubt, it must be determined by interpretation whether a company is considered a partnership or a corporation under German law, which can sometimes be problematic in the case of an LLC or LLP.

White income?

In the past, so-called qualification conflicts made it possible to generate white income, i.e. income that was not taxed in either the country of residence or the source country. Germany has introduced numerous tax abuse regulations to avoid this. We would be happy to advise you on this.

Freelance lawyers can save money!

If you are a freelancer or work in a partnership or partnership of freelancers, you can save yourself a lot of the work that large law firms have to do in the legal form of a corporation.

These include:

Double-entry bookkeeping (instead, you only need to note down income and expenditure and keep the receipts in an orderly manner)
Accrual of income and expenses
Valuations of inventories
Annual financial statements (instead, you only need an income statement and must complete the “EÜR” and “S” annexes to your income tax return)
No disclosure or filing of financial data
If you are a so-called small business owner, you do not have to list VAT on your invoices and pay it to the tax office.
However, you cannot claim input tax either.
If your turnover is still low, you do not need to submit monthly advance VAT returns.
It is then sufficient to submit a quarterly return or even an annual VAT return just once a year.
As a freelancer, you are not subject to trade tax and also save the expense of preparing a trade tax return.

So it can be done with little effort. On the other hand, it can still be complicated and you need an expert to avoid any nasty surprises at the next tax audit.

Some business expenses regularly lead to disputes with the tax office. These include, for example, expenses for the company car, gifts to customers and employees, travel expenses, company outings, entertainment costs or the costs of a home office.
Commissioning freelancers often leads to problems regarding bogus self-employment, the artists’ social security fund and minimum wage.

Accounting: getting it right from the start is cheaper than correcting it

If, for example, you enter the receipts yourself or have your own untrained employees do so in the hope of keeping the costs for tax advice low, you should bear in mind that the effort for the professional to correct the mistakes of an accounting layman is often greater than having the entire bookkeeping done by a tax consultant from the outset. Incidentally, incorrect advance VAT returns have to be corrected and often lead to inquiries from the tax office. If this happens frequently, it could trigger a tax audit or VAT inspection.
If the auditor from the tax office finds that you cannot rely on the figures, he can reject the entire bookkeeping and estimate the profit himself.
Avoid this – with our help!