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Taxes and bookkeeping for ai startups, ai agencies and automation consultants
Building AI products or agents, or helping businesses automate? Your bookkeeping looks different from that of a traditional business: US subscription invoices, API costs, cloud servers and hardly any paper receipts.
Typical tax topics for AI businesses
1. Overseas API and tool invoices: reverse charge
OpenAI, Anthropic, AWS, Google Cloud, GitHub and Vercel: most of your suppliers are based outside Germany. For these services, you owe VAT as the recipient under the reverse-charge procedure (§ 13b UStG). You report it in your advance VAT return and deduct it as input VAT at the same time if eligible. Usually the amounts offset each other, but reporting is mandatory.
2. Internally developed software and AI models
You cannot capitalise software or models you develop yourself for tax purposes (§ 5(2) EStG). Costs such as training compute and freelancer invoices reduce your profit directly.
3. Hardware: laptops, GPUs and servers
For tax purposes, you can depreciate computer hardware and software over a one-year useful life, allowing a full deduction in the year of purchase. This also applies to an expensive GPU workstation.
4. Many small subscriptions, no paper receipts
A typical AI business has 20 or more monthly subscriptions. You need an invoice as supporting evidence for each one and must record it correctly.
5. Customers in Germany, the EU and worldwide
You invoice German customers with 19% VAT. For business customers in other EU countries, reverse charge usually applies: you invoice without German VAT and report the sale in your recapitulative statement. For digital services to EU consumers, VAT in the customer’s country may apply; you report and pay it through the One Stop Shop (OSS).
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
Do I owe VAT on OpenAI or Anthropic invoices?+
Yes, under reverse charge. You report the VAT yourself and deduct it as input VAT at the same time if eligible.
Can I deduct my GPU immediately?+
You can depreciate computer hardware over a one-year useful life. In most cases, this lets you deduct the full cost in the year of purchase.
Is a UG suitable for an AI startup?+
Many AI founders start with a UG (entrepreneurial company) because it requires little share capital. For tax purposes, it is treated like a GmbH (limited liability company).
How do I invoice customers in other EU countries?+
For business customers, usually without German VAT and with a reverse-charge note. For consumers, depending on turnover, you charge VAT in the customer’s country and report it through OSS.
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