Responsibilities: What Does a Tax Consultant Do?

Before diving into risks, tips, and fees, let’s start with an overview: Which core areas does a tax firm cover? The work goes far beyond classic bookkeeping — from financial accounting through full payroll accounting and salary calculations to strategic tax planning, choice of legal structure, setting up a holding company, and representation before the tax office and tax court.

What Does a Tax Consultant Do, Simply Explained?

The ten typical core tasks of a tax firm for companies:

1. Tax Planning & Advisory: Choice of legal structure, holding structure, tax optimization
2. Financial Accounting: Posting, chart of accounts, ongoing entries
3. Payroll Accounting: Salary calculations, social contributions, reports to health insurance and tax office
4. Einkommenüberschussrechnung (EÜR) for freelancers & small businesses
5. Preliminary Declarations: Value Added Tax, Payroll Tax, Capital Gains Tax
6. Annual tax returns: Income tax, capital gains tax, corporate tax, trade tax, inheritance and gift tax
7. Annual financial statements & balance sheet: including notes, management report, publication in the Federal Gazette
8. Review of tax assessments: appeal, lawsuit, representation before the tax court
9. Special real estate topics: depreciation, §6b Income Tax Act, commercial land trading, speculation periods
10. Support in special situations: inheritance, gift, sale, insolvency, tax audit

A complete overview of the relevant terms can be found in the Real Estate Lexicon.

Compare tax advisors: The 3 biggest risks

Are you looking for a good tax advisor nearby? Before you sign — do you know the three biggest risks? Because choosing the wrong firm can have long-term financial consequences that many entrepreneurs only realize after years.

Risk 1: Intensive, regular commitment

After signing a mandate agreement, you are bound to the firm in nearly all financial and tax aspects — from monthly pre-notifications to payroll calculations up to inquiries, often almost weekly. The interconnection is particularly close for self-employed individuals, small GmbHs, and growing companies, where management often handles many tasks themselves.

A change is therefore not possible overnight. A realistic timeframe for a clean transition: 3 to 6 months — including data transfer (DATEV inventory, client master data), change of power of attorney at the tax office, and final invoice from the old firm.

Risk 2: Monthly Cost Burden

Tax advisors do not work for free. The costs consist of three blocks:

1. Ongoing bookkeeping — billed according to the subject value (revenue/expenses), Table C of the StBVV
2. Payroll accounting — flat rate per employee and month (15–25 €)
3. Additional services — consultation, annual accounts, special questions, all charged by the hour at rates of 120–300 € (consultant) or 60–120 € (employee)

The catch: The higher your turnover, the higher the bookkeeping fee — even if the effort does not increase proportionally. If your turnover jumps from 250,000 € to 1 million €, the bookkeeping flat rate doubles, even though the number of entries may only increase by 30%. Tip: Negotiate a flat-rate agreement under §14 StBVV once you reach a certain turnover level.

Risk 3: Losing money due to insufficient advice

The training to become a tax consultant is by no means trivial — tax consultant exam, professional experience, tax specialist training. However: Many tax consultants learn standards, not tax planning.

Many tax consultants are tax auditors — not tax planners

They handle the posting, invoice employees appropriately, and carry out the annual accounts correctly. The question is: Is that enough? Depending on the company, goals, and scale, a tax consultant should do much more — especially in the real estate sector.

Lack of advice carries two risk factors:

• Losses from missed advice: unused tax benefits, lack of holding structure, no mention of calculating the speculation period when selling real estate
• Risks from too much (unstructured) advice: cost-benefit ratio turns — every minute is billed

Suddenly, the monthly costs are no longer 400, 500 or 800 €, but 4,200 € — due to unplanned advice, document procurement by employees and research time. By the time a managing director notices this, years may have passed.

Calculation example: What does poor advice really cost?

Let’s take a realistic scenario of a medium-sized GmbH with real estate activity:

Difference: 48,200 € per year — and that without the compounding effect of the reinvested amounts. Whoever reinvests 30,000 € annually for 10 years at 6 % ends up with about 395,000 € more wealth. This is the real cost of poor advice.

Paying taxes means losing profits

Taxes are the biggest cost factor in most companies

By the way: What is actually your biggest monthly cost factor once you’re in the five- to six-figure revenue range? Rent? Personnel? For the majority of companies, it’s actually taxes — considering corporate tax, trade tax, capital gains tax, and additionally the speculation tax or real estate transfer tax when purchasing property.

Checklist: The 3 biggest risks at a glance

• Intensive commitment — switching takes 3–6 months
• Amount of monthly and unplanned additional costs
• Long-term loss of wealth due to poor tax planning (too much tax + costs + missed reinvestment)

Keep in mind: Tax planning is largely in your hands — the tax advisor is a sparring partner, not the sole person responsible.

Find a tax advisor: The 3 best tips from practice

After the risks, here are the tips: How do you find a good tax advisor? Three strategies that have worked in over 20 years of practice.

Tip 1: Avoid ads

The most important tip first: Don’t click on the ads in search engines. You’re looking for a tax advisor in Berlin-Mitte, Cologne or Hamburg and type — like 92% of people — your query into a search engine. The top positions are paid ads, marked only by a small “Ad” or “Sponsored”.

Practical tip: Go directly to page 2 of the search results. There you’ll find the law firms that don’t finance their marketing budget from client fees — and thus often the more serious providers. After all, who ultimately pays the marketing budget? You, the client.

Tip 2: Check reviews on online portals

Popular are comparison portals, online magazines and industry directories (proven expert, Google Business, kanzleifinder.de of the Federal Tax Consultants Chamber). Pay attention to qualitative and quantitative meaningful reviews:

• At least 5–10 reviews, in big cities 20+
• Meaningful texts (not just “5 stars, top!”)
• Reviews spread over several years (no star explosion within 4 weeks)
• Check negative reviews — how does the office react to them?

Tip 3: Recommendations from experienced entrepreneurs

The goldmine: Recommendations from other entrepreneurs. Important — the sources must match:

• Entrepreneurs, not private individuals (different matter, different requirements)
• At least 3–5 years of client relationship (shorter is not meaningful)
• Comparable industry & size — a restaurant tax consultant is not a real estate specialist
• Ideally with similar structures (holding company, GmbH & Co. KG, international connection)

Insider Tip: Anyone investing in real estate should specifically look for advisors who manage mandates in the areas real estate as an investment, buying an apartment building or buying a historic property.

Insider: Diese drei Berater-Typen gibt es