UK-Owned Subsidiary

UK company with a German subsidiary: the HGB statutory duty

If a UK company owns a German GmbH, the German entity files its own statutory accounts under the HGB, whatever framework the UK group uses. This page compares HGB with FRS 102 and IFRS, sets out the filing duty, and explains the post-Brexit points that actually matter.

The German entity files HGB, whatever the group uses

A UK group may report under FRS 102 (UK GAAP) or IFRS, but the German subsidiary must prepare its stand-alone Jahresabschluss under the HGB, in German and euros (§ 244 HGB). Its Bilanz follows the fixed structure of § 266 HGB and its GuV the formats of § 275 HGB — these are not optional formats you can swap for a UK layout.

The subsidiary's HGB figures then feed the UK parent's own consolidation. jahresabschluss.io prepares the single-entity German statements; the group consolidation stays with the UK finance team.

HGB vs FRS 102 / IFRS

Where UK-trained accountants most often get caught out.

Measurement

HGB is historical-cost and prudence-led (§ 253), with no revaluation model for property and no fair-value option for investment property that FRS 102 and IFRS allow.

Provisions

HGB recognises provisions relatively readily under § 249. The recognition threshold and measurement can differ from FRS 102/IFRS, so provision balances rarely match one-to-one.

Disclosures by size

HGB scales disclosure sharply by size class (§§ 267, 267a). A small German subsidiary discloses far less than a UK small company and files no GuV publicly.

Tax linkage

HGB is linked to the tax accounts through the Maßgeblichkeitsprinzip (§ 5 EStG). UK GAAP has no equivalent one-to-one book-tax anchor, so the German book drives the tax base more directly.

Post-Brexit: what changed and what didn't

Brexit did not change the core duty: a UK-owned German GmbH still prepares and files its own HGB statutory accounts on the same deadlines as before. That obligation was never dependent on EU membership.

The nuance is narrow and rarely relevant here: certain HGB exemptions that let a German sub-group skip preparing German consolidated accounts, because it was included in an EU parent's consolidation (§ 291 HGB), no longer apply automatically to a UK parent, since the UK is a third country (the § 292 equivalence route applies instead). That only touches whether an intermediate German holding must consolidate — a separate question from this product. Every individual German GmbH still files its own single-entity HGB statements regardless.

Deadlines and filing

  • Preparation within 3 months (medium/large) or 6 months (small/micro) of year-end (§ 264 Abs. 1 HGB).
  • Shareholder adoption within 8 or 11 months for a GmbH (§ 42a GmbHG).
  • Audit only for medium and large corporations (§ 316 HGB); small and micro are exempt.
  • Filing with the Unternehmensregister within 12 months of the balance sheet date (§ 325 HGB).
  • Late filing triggers Bundesamt für Justiz penalties from €2,500 that repeat until you comply (§ 335 HGB).

Reporting into the UK consolidation

The German subsidiary delivers a reporting package — its HGB trial balance mapped to the group chart of accounts, intercompany balances flagged, and a bridge from HGB to the group's framework. The UK parent consolidates from there.

Keeping one HGB statutory truth and deriving the group package from it is cleaner than maintaining two independent ledgers. It also means the number you file in Germany and the number you report to the group are demonstrably reconciled.

Frequently asked questions

Did Brexit change German filing duties for a UK-owned GmbH?

No. The German subsidiary still prepares and files its own HGB statutory accounts on the usual deadlines. Brexit only affected narrow consolidation-exemption routes for intermediate holdings, not the single-entity filing duty.

Can we prepare the German entity's accounts under FRS 102?

No. The statutory single-entity accounts must be HGB, in German and euros (§ 244 HGB). FRS 102 or IFRS is used only for the UK group's own reporting.

What are the main HGB vs FRS 102 differences?

HGB is stricter on historical cost with no revaluation model, recognises provisions more readily (§ 249), scales disclosure hard by size class, and is tightly linked to the tax accounts (Maßgeblichkeit). Balances therefore rarely match one-to-one.

Does a UK-owned German subsidiary need an audit?

Only if it is medium or large under § 267 HGB. A small or micro subsidiary is not subject to a statutory German audit, independent of the UK parent's own audit position.

What language and currency must be used?

German and euros (§ 244 HGB). An English translation is a convenience version for the group; the filed, legally binding document is the German original.