The EÜR – short for Cash-basis income statement – is a tax method for determining profit. In this method, profit is fundamentally calculated as the excess of business income over business expenses.
What is a Cash-basis income statement (CASH-BASIS INCOME STATEMENT)?
Under CASH-BASIS INCOME STATEMENT, the operating income and operating expenses of a profit determination period are compared. If operating income exceeds operating expenses, a profit generally results.
The CASH-BASIS INCOME STATEMENT is therefore to be distinguished from profit determination by comparison of company assets and Bilanz.
What does the cash-basis accounting principle mean?
For the chronological allocation of income and expenses, CASH-BASIS INCOME STATEMENT is fundamentally determined by when an amount of income is actually received or an expense is paid.
There are statutory exceptions to this basic principle. Therefore, CASH-BASIS INCOME STATEMENT cannot be equated with a simple examination of all account movements in every individual case.
Who can use a CASH-BASIS INCOME STATEMENT?
Under Section 4(3) of the Income Tax Act (EStG), taxpayers can determine their profit using a CASH-BASIS INCOME STATEMENT if they are not required by law to keep books and regularly prepare financial statements, and do not choose to do so voluntarily.
Whether the requirements are met in an individual case depends on the applicable commercial and tax law regulations.
CASH-BASIS INCOME STATEMENT and double Bookkeeping – what is the difference?
When the double-entry bookkeeping business transactions are systematically recorded in accounts on the debit and credit sides. Among other things, it forms the basis for Balance sheet and profit and loss statement.
In contrast, for CASH-BASIS INCOME STATEMENT, taxable profit is generally determined by comparing operating income with operating expenses. An Balance sheet is not required for this method of profit determination.
The CASH-BASIS INCOME STATEMENT is therefore also from the Accounting to distinguish.
What records are required for a CASH-BASIS INCOME STATEMENT?
Even with a Cash-basis income statement, the income and expenses relevant to profit determination must be recorded in a comprehensible manner and the associated documents must be kept in accordance with the applicable regulations.
The CASH-BASIS INCOME STATEMENT therefore does not mean that tax recording or documentation requirements can be waived.
