Retention Obligation
The retention obligation is the legal duty to keep documents relevant for tax and commercial law – vouchers, books, invoices and business letters – for a defined period in an orderly, complete and legible form.
The retention obligation is the legal duty of merchants and companies to keep business documents and records relevant for tax purposes for a defined period in an orderly, complete, unalterable and permanently legible form. It derives primarily from the German Commercial Code (HGB), the Fiscal Code (AO) and the VAT Act (UStG) and is meant to ensure that business transactions can be traced seamlessly after the fact – for example during a tax audit.
It applies to all companies subject to bookkeeping and recording duties, from the sole trader to the corporate group. The retention obligation covers not only paper documents but explicitly electronic records as well: e-invoices, PDF vouchers, e-mails with business content and the posting data generated in the ERP system. A digital document must be retained in the format in which it was received and remain machine-readable throughout the entire period.
At a glance
- Legal duty to keep vouchers and books in an orderly, legible form – based on HGB, AO and UStG
- Standard periods: 8 years for accounting vouchers, 10 years for books/financial statements, 6 years for business letters
- The period starts at the end of the calendar year of the last entry or of the document’s creation
- Applies to paper AND electronic records – e-invoices in their original format
- ERP systems implement it via audit-proof archiving and record locking
Legal basis of the retention obligation
The retention obligation is not a single law but is spread across several provisions that complement each other. Under commercial law, § 257 HGB requires every merchant to retain their commercial books, inventories, balance sheets, accounting vouchers and business letters. Under tax law, § 147 AO demands the same for all records of tax relevance and extends the circle of obligated parties to everyone subject to bookkeeping and recording duties under tax law.
HGB, AO and UStG working together
While HGB and AO govern the scope and periods, § 14b UStG adds its own retention obligation for invoices. Under it, entrepreneurs must retain a copy of every invoice issued as well as all invoices received – throughout the entire period the authenticity of origin, the integrity of the content and legibility must be guaranteed. For private recipients of construction work on real estate there is even a separate, shorter retention obligation.
Order, completeness and legibility
Retaining does not simply mean “not throwing away”. The documents must be filed so that a competent third party can review them within a reasonable time. Electronically retained data must remain available, immediately legible and machine-readable throughout the entire period – merely printing out and destroying the original file is explicitly not sufficient for documents received digitally.
Retention periods: 8, 10 and 6 years
The length of the retention obligation depends on the type of document. Ten years apply to commercial books, inventories, opening balance sheets, annual financial statements, management reports and the working instructions needed to understand them. Six years apply to business and commercial letters received and sent as well as other documents of tax relevance.
For accounting vouchers – that is, invoices, receipts, bank statements and similar documents – the period was shortened from ten to eight years by the Fourth Bureaucracy Relief Act (BEG IV). The shortened period applies to vouchers whose ten-year retention period had not yet expired at the time it came into force. Anyone unsure which period applies to a specific voucher should clarify this with their tax adviser.
When the period begins and pauses
The period does not start on the day of issue but at the end of the calendar year in which the last entry was made, the inventory drawn up, the balance sheet finalized or the accounting voucher created. An invoice created in 2026 with an eight-year period must therefore be retained until the end of 2034. Important: the period does not expire as long as the documents are relevant to a tax assessment that is not yet time-barred – for example during an ongoing tax audit.
Which documents are subject to retention
Everything of relevance to taxation or to the commercial books is subject to retention. This includes outgoing and incoming invoices, till receipts and cash reports, bank statements, delivery notes with voucher function, payroll records, contracts, inventory lists, annual financial statements and the associated process documentation. Business e-mails must also be retained if they have the function of a commercial letter or accounting voucher.
Purely private documents as well as internal notes without a voucher or commercial-letter function are not subject to retention. However, the principle “no posting without a voucher” remains decisive: every business transaction recorded in the books needs a retained piece of evidence. For electronic documents, the structural information and master data needed for evaluation also form part of the records to be retained.
Retention obligation in the ERP system
In the ERP system the retention obligation is implemented technically via audit-proof archiving. Vouchers and postings are stored unalterably once they have been locked; subsequent corrections are only possible as a logged reversal or correction posting, so that the original state is preserved. A gapless audit trail documents who created or changed which record and when.
Modern systems integrate a digital document archive (DMS) that holds incoming invoices, e-invoices and outgoing documents in their original format and links them to the postings. Via a DATEV or BMD interface, vouchers and posting data are handed over to the tax firm without losing traceability. For a later tax audit, ERP systems provide the data in the required data access (Z1/Z2/Z3). Whether a specific solution meets the requirements depends on configuration, processes and the process documentation – the responsibility remains with the company.
Distinction: retention obligation, GoBD and GDPR
The retention obligation is often confused with the GoBD and audit security, but these concern different levels. The retention obligation answers the question “What must be kept and for how long?”. The GoBD, as an administrative regulation of the German Federal Ministry of Finance, describe how this retention and electronic bookkeeping are to be carried out properly – traceably, completely and unalterably. Audit security is the technical implementation of this unalterability.
There is a tension with the GDPR: its principle of storage limitation requires personal data to be deleted once the purpose ceases to apply. The statutory retention obligation, however, is a justification that prohibits deletion during the ongoing period. In practice such data is therefore blocked and only deleted after the period expires. Retention obligation and deletion obligation must therefore be reconciled with one another.
DACH specifics: Germany, Austria, Switzerland
The specific periods differ within the DACH region. In Germany, since BEG IV, eight years apply to accounting vouchers and ten years to books and financial statements. In Austria, the general retention period under § 132 BAO is seven years, but it is extended as long as the documents relate to pending proceedings or to real estate in connection with input-tax adjustments.
In Switzerland, Art. 958f OR prescribes a retention period of ten years for business books, accounting vouchers and the annual report; the annual report and the audit report must be retained in written and signed form. Companies operating across borders must therefore observe the retention obligation applicable to each entity – a reason to keep archiving cleanly separated per country in multi-client ERP systems.
Example
Example: online retailer reviews its retention periods
A mid-sized e-commerce retailer receives incoming invoices as PDF and e-invoice, creates outgoing invoices in the ERP and hands the postings over to the tax firm each month via DATEV. Every voucher lands audit-proof in the connected document archive and is linked to the posting. A customer invoice created in 2026 falls under the eight-year period as an accounting voucher and must therefore be kept until the end of 2034.
The 2026 annual financial statement, by contrast, is subject to the ten-year period and must be retained until the end of 2036. Because the invoices contain personal customer data, this data is not deleted under the GDPR but blocked until the period expires. In this way the retailer meets the retention obligation and the deletion requirements at the same time – and can prove every transaction from voucher to posting during a tax audit.
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