Accounting

Income-Expenditure Statement: The Complete Guide for Freelancers

The income-expenditure statement is the simplest form of profit determination. Learn who can use it and how to create it.

Markus Wagner · ·13 min read

The income-expenditure statement is the simplest method for many self-employed to determine their profit.

What Is the Income-Expenditure Statement?

A simplified profit determination according to § 4 Para. 3 EStG:

Profit = Income - Expenses

You only record what actually flows in and out (cash basis accounting).

Who Can Use It?

Freelancers: Everyone, regardless of revenue Traders: If not in commercial register and revenue under €600,000 and profit under €60,000

How to Create One

  1. Record income: All business income in the calendar year
  2. Record expenses: All business expenses
  3. Calculate profit: Income minus expenses

Avoid Common Mistakes

  • Don't deduct private expenses
  • Keep receipts for 10 years
  • Handle VAT correctly
  • Consider depreciation for purchases over €800

Frequently asked questions

Do I have to create it myself?

You can create it yourself or hand it to your tax advisor.

When is it due?

Part of tax return, due July 31 of following year.

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