Home › Industries › Agencies
Taxes and bookkeeping for marketing, design, social media and web agencies
Client projects, freelancer invoices and advertising budgets with Meta and Google: an agency’s books often include substantial amounts that are not yours to keep.
Typical tax topics for agencies
1. Your clients’ advertising budgets
If you run client ads through your own advertising account, Meta or Google invoices come from Ireland. You account for VAT under reverse charge and deduct it as input VAT if eligible. Recharging your client is an ordinary sale with 19% VAT.
2. Freelancers and subcontractors
Designers, copywriters and developers: many agencies work with independent partners. Their invoices are business expenses. Reverse charge usually applies to suppliers from other EU countries. Fees paid to independent creatives may also attract the Künstlersozialabgabe (artists’ social security levy).
3. Project billing and advance payments
For larger projects, you often issue interim invoices. VAT is due when you receive the advance payment. At year-end, you must account correctly for unfinished projects on your balance sheet.
4. EU business clients
You invoice business clients in other EU countries without German VAT, with a note stating that the customer is liable for VAT. You report these sales in your recapitulative statement.
5. Tools, software and hardware
Adobe, Figma, Notion and Canva: most tools come from abroad and are subject to reverse charge. You can depreciate computers and software over a one-year useful life.
Bookkeeping, duties and deadlines
Bookkeeping: A UG (entrepreneurial company) or GmbH (limited liability company) is a commercial entity by legal form. You must keep double-entry books under the German Commercial Code (HGB) and prepare a Jahresabschluss (annual financial statements) each year, comprising a balance sheet, profit and loss account and notes. Micro-entities may omit the notes.
Annual financial statements: For small companies, you have up to six months after the financial year ends to prepare the statements. You must disclose them in the Unternehmensregister (company register) within twelve months of year-end. You submit them electronically to the Finanzamt (tax office) as an E-Bilanz (electronic tax balance sheet).
Annual tax returns (you file by 31 July of the following year if filing without a tax advisor):
- Corporation tax return: 15% of profit plus a solidarity surcharge of 5.5% on that tax
- Gewerbesteuer (trade tax) return: based on your municipality’s assessment multiplier
- Annual VAT return
- Investment income withholding tax notification if your company distributes profits
Ongoing: You file advance VAT returns monthly or quarterly, depending on the previous year’s VAT, by the 10th of the following month (one month later with a permanent filing extension). Corporation tax prepayments fall due on 10 March, June, September and December; trade tax prepayments on 15 February, May, August and November.
Record retention: Keep supporting documents such as invoices and bank statements for eight years, and books and annual financial statements for ten years.
You can manage your bookkeeping, prepare annual financial statements and create tax returns in Pluto. Employee payroll, non-standard international matters, tax groups, transformations and tax audits are outside its scope.
Frequently asked questions
How do I record advertising budgets I advance for clients?+
The Meta or Google invoice is your expense under reverse charge. Recharging the client is your revenue with VAT.
Does my agency owe the artists’ social security levy?+
If you regularly commission independent creatives such as designers or copywriters, the levy may apply. You report it to the Künstlersozialkasse (artists’ social insurance fund), not the Finanzamt (tax office).
Do I need a tax advisor for my agency?+
You remain responsible for your company’s bookkeeping, Jahresabschluss (annual financial statements) and tax returns. A tax advisor can help with complex matters such as restructuring or tax audits.
Pluto Tax is a software tool that supports you in preparing your own tax returns. It does not provide tax advice within the meaning of the German Tax Advisory Act.
Updated: October 2026