HGB for SMEs

HGB for SMEs: the size-based reliefs that make German GAAP lighter than IFRS

For small and medium German companies, HGB is not a burden to fear. It is a graduated system that removes work as you get smaller. This page sets out the reliefs a small (klein) or micro (kleinst) entity enjoys, and why HGB is markedly simpler than IFRS for an SME.

Size classes decide almost everything

HGB's reliefs hang off the size class (§ 267 / § 267a). You are small if you stay under two of three limits, up to €7.5m balance sheet total, €15m revenue and 50 employees, on two consecutive balance sheet dates. You are micro if you stay under €450,000, €900,000 and 10 employees.

The smaller the class, the fewer the obligations. The thresholds were raised by the Wachstumschancengesetz for fiscal years beginning after 31 December 2023, so more companies now qualify as small or micro and gain the reliefs below.

The reliefs that matter

What a small or micro entity is spared.

No statutory audit

Small and micro corporations are exempt from audit; only medium and large must appoint a Wirtschaftsprüfer (§ 316). This alone saves an SME significant cost and time. Cooperatives (eG) are still audited by their Prüfungsverband regardless of size (§ 53 GenG).

No management report

The Lagebericht (§ 289) is required only for medium and large entities. Small and micro corporations are exempt (§ 264 Abs. 1 Satz 4), so there is no narrative report to write.

Reduced notes

A small entity files a much-shortened Anhang and no public income statement. A micro entity may omit the Anhang almost entirely by showing a few figures under the balance sheet (§ 264 Abs. 1 Satz 5).

The micro deposit option

A micro entity may deposit (hinterlegen) a shortened balance sheet with the Unternehmensregister instead of publishing it (§ 326 Abs. 2), so its figures are not openly displayed.

Longer deadlines, lighter filing

Small and micro companies also get more time to prepare: 6 months from the balance sheet date rather than the 3 months required of medium and large entities (§ 264 Abs. 1). The public filing is due within 12 months (§ 325).

What actually gets published shrinks with size. A small entity publishes the balance sheet and reduced notes but no GuV, and a micro entity may deposit rather than disclose. Compared with the full IFRS disclosure package, an SME's HGB filing is short.

Why HGB beats IFRS for an SME

IFRS applies the same heavy measurement and disclosure to everyone; there is no small-company IFRS in Germany for statutory purposes. HGB's historical-cost, prudence-based measurement is simpler to apply, needs no fair-value valuations, and scales disclosure to size.

Small entities are also largely exempt from deferred-tax recognition (§ 274a), removing another IFRS-style complexity. For an owner-managed GmbH, HGB is both the required framework and the lighter one.

SME relief checklist

  • Micro and small: no statutory audit (§ 316).
  • Small and micro: no Lagebericht (§ 264 Abs. 1 Satz 4).
  • Small: reduced Anhang and no public GuV; micro: the Anhang may be omitted (§ 264 Abs. 1 Satz 5).
  • Micro: deposit a shortened balance sheet instead of publishing (§ 326 Abs. 2).
  • Small and micro: 6 months to prepare, 12 months to file.
  • Small: largely exempt from deferred-tax recognition (§ 274a).

Frequently asked questions

Does a small German GmbH need an audit?

No. Only medium and large corporations must be audited under § 316. Small and micro entities are exempt, although eG cooperatives are audited by their Prüfungsverband regardless of size.

Do small companies have to prepare a Lagebericht?

No. The management report (§ 289) is required only for medium and large corporations; small and micro entities are exempt (§ 264 Abs. 1 Satz 4).

What is the micro-entity deposit option?

A Kleinstkapitalgesellschaft may deposit (hinterlegen) a shortened balance sheet with the Unternehmensregister rather than publish it (§ 326 Abs. 2), keeping its figures from open display.

Is HGB simpler than IFRS for a small company?

Yes. HGB scales disclosure and measurement to size and uses historical cost, while IFRS applies full fair-value measurement and disclosure to every entity, with no small-company statutory regime in Germany.

Did the size thresholds change recently?

Yes. The Wachstumschancengesetz raised them for fiscal years beginning after 31 December 2023, so more companies now qualify as small or micro and gain the reliefs.