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Taxes and bookkeeping for online retailers and e-commerce businesses
Physical products, warehouses, returns and marketplaces: an online shop has different bookkeeping needs from a service business.
Typical tax topics for online shops
1. Shipping to other EU countries: OSS
When you sell to consumers in other EU countries, VAT in the destination country applies once relevant EU-wide annual turnover exceeds €10,000. You report these sales together in Germany through OSS.
2. Stock and inventory counts
As a UG (entrepreneurial company) or GmbH (limited liability company), you prepare a balance sheet. At year-end, you must count and value your stock. Goods still in the warehouse are not yet an expense. Only goods sold reduce your profit.
3. Marketplaces and payment providers
Amazon, eBay, Shopify Payments, PayPal and Klarna bundle payouts and deduct fees. You still need traceable, separate records of sales, fees and refunds. Fee invoices from other EU countries are often subject to reverse charge.
4. Advertising with Meta, Google and TikTok
Advertising invoices generally come from elsewhere in the EU without German VAT. You account for VAT under reverse charge and deduct it as input VAT if eligible.
5. Returns and credit notes
Returns reduce revenue and VAT in the month of the refund. Recording returns correctly prevents you from paying VAT on money you have already refunded.
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
Does my online shop need an inventory count?+
Yes. As a UG or GmbH, you must count and value your stock at the balance sheet date.
When does destination-country VAT apply?+
When your annual distance sales to consumers in other EU countries exceed €10,000. You then report through OSS.
How do I record Amazon payouts?+
Split them into sales, fees and refunds rather than recording one amount.
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