Your tax advisor stops replying, reports arrive months late, or they won’t take on more work as your business grows. Many freelancers and small businesses stay anyway because they think switching is complicated. Usually it isn’t, as long as you do things in the right order.
The short answer
You can usually end an ongoing tax advisory contract at any time, without notice and without giving a reason. Your tax advisor has to hand over your receipts and documents. The order matters. First you set up the new solution, then you cancel.
Common reasons to switch
- Questions sit unanswered for weeks.
- Reports and numbers only arrive months after the end of the month.
- The bookkeeping sits in the tax advisor’s DATEV and you have no access yourself.
- The firm is overloaded and won’t take on any more work.
- You’re paying for work that properly set-up software would mostly do on its own.
What the law says about cancelling
Under German law, an ongoing tax advisory contract counts as a contract for services of a higher nature (Dienste höherer Art). That’s why you can usually end it at any time under § 627 BGB, without notice and without a reason. It can be different if you only outsourced the bookkeeping in a separate contract or pay a fixed monthly fee for all services. Then regular notice periods may apply, so check your contract first.
Don’t cancel in the middle of ongoing work, for example shortly before a filing deadline. A cut-off at the end of a month or at the end of the year works better.
Getting your documents and data back
Receipts, contracts and tax assessments that your tax advisor received from you or for you have to be handed over (§ 66 StBerG). That also applies to electronic data. You usually only get the bookkeeping and financial statements your tax advisor prepared if you’ve paid for that work. If invoices are still open, they can hold back the documents until you pay. So settle open invoices before you switch, or sort them out in writing.
Besides receipts and contracts, ask explicitly for a data export from DATEV, plus the last annual financial statements, the VAT returns and the tax assessments.
Template cancellation letter
Your tax advisor is in Germany, so send the letter in German. Here’s a template, with what it means in English underneath.
Sehr geehrte Damen und Herren,
hiermit kündige ich den Steuerberatungsvertrag mit Wirkung zum [Datum].
Bitte bestätigen Sie mir die Kündigung schriftlich. Bitte geben Sie mir alle Unterlagen und Daten heraus, die mein Unternehmen betreffen, einschließlich eines vollständigen Datenexports aus DATEV.
Mit freundlichen Grüßen
[Name, Firma]
In English: I hereby terminate the tax advisory contract effective [date]. Please confirm the termination in writing and hand over all documents and data relating to my company, including a complete DATEV data export.
The right order
- Check your contract for notice periods.
- Decide how to continue: a new tax advisor, handing over the ongoing bookkeeping, or doing it yourself.
- Set up the new solution before you cancel.
- Settle open invoices or sort them out in writing.
- Cancel in writing and ask for your documents and the data export.
- Revoke your tax advisor’s power of attorney (Vollmacht) with the tax office once the handover is settled.
Do you need a tax advisor again at all?
Many people look for the next firm straight after switching and can’t find one that takes on new clients. There are three ways to go.
A new tax advisor. The new firm does everything, as before. Makes sense if you don’t want to do anything yourself.
Hand over the ongoing bookkeeping, tax advisor only for the year end. I record your day-to-day business transactions in your own software. You see up-to-date numbers at any time, and your tax advisor only does the year end. You send the VAT return yourself from your software or through your tax advisor.
Do it yourself. For your own business you’re allowed to do all of the bookkeeping yourself, including VAT returns and the annual financial statements.
I record your day-to-day business transactions and prepare your VAT returns and year-end closing up to the final step. You or a tax advisor of your choice then submit them.
Common questions
Can I switch tax advisors in the middle of the year?
Yes. A cut-off at the end of a month is easiest. What matters is that the new solution is in place before you cancel.
Can my tax advisor hold back my documents?
Only while due invoices are unpaid, and not even then if that would be unreasonable. Otherwise they have to hand over the receipts and documents they received from you.
What happens to my DATEV data?
Ask for a complete data export. You get the bookkeeping your tax advisor prepared once it’s paid for. With the export, the bookkeeping can be continued in other software.
Will I even find a new tax advisor?
Many firms aren’t taking on new clients right now. If you hand over the ongoing bookkeeping or do it yourself, you’ll need a tax advisor for the year end and the tax returns at most.
This article isn’t legal advice. If in doubt, check your contract.
