Advance returns, tax returns & deadlines · 3.8
Why does the second year catch many founders off guard?
Short answer
In the first year, the tax office often sets advance prepayments very low. After the first annual tax return, everything hits at once: the back tax payment for the first year and higher prepayments for the current year, sometimes retroactively for multiple quarters.
Key points
Example: Your GmbH generates €60,000 in profit in year one, and advance prepayments were set to zero. After the assessment notice, you pay around €18,000 in back taxes for year 1 and simultaneously the adjusted advance prepayments for year 2.
- Set aside a fixed portion of every receipt for taxes right from the start, ideally in a separate bank account.
- Notify the tax office early if your profit is significantly higher than originally estimated. Advance prepayments will then be adjusted, keeping the subsequent back tax payment smaller.
- Back taxes may incur interest after a statutory grace period.
Figures & thresholds (as of November 2026)
- Sample calculation with roughly 30% tax burden (Körperschaftsteuer (corporate income tax), solidarity surcharge, Gewerbesteuer (trade tax) at a 400% assessment rate)
- Interest on back taxes: 0.15% per month, interest period generally begins 15 months after the end of the tax year
Legal basis
§ 31 KStG§ 37 EStG§ 19 GewStG§ 233a AO
Continue
- Next video: The Tax Calendar: All Deadlines at a Glance
- Related: Myth: “I don’t pay any taxes in the first year.”
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