In the case of a sales tax payable amount of 1,001 to 7,500 euros, the pre-registration must be submitted quarterly and for a sales tax payable over 7,500 euros monthly. All newly founded companies that expressly waive the small business regulation are an exception. In principle, there is always a monthly charge for them.
The Debt Taxation Process
- All entrepreneurs who are subject to debit taxation must pay the sales tax as soon as they have sent the invoice to the customer.
- Whether and when this invoice is paid is completely irrelevant to the tax office. Members of the liberal professions and persons who are exempt from the accounting obligation can choose the actual taxation.
- The actual taxation has the great advantage that the sales tax only has to be registered and paid when the customer has actually paid the invoice.
- Every entrepreneur is obliged to invoice the customer for sales tax. On the other hand, he can also claim input tax for all purchases or investments that have a clear business connection.
- The sales tax rate in Germany is 19%. The reduced tax rate of 7% can only be claimed for certain areas such as gastronomy, the hotel industry, media usage and art.
Any entrepreneur who wishes to do so can apply to their responsible tax office for a permanent extension of the deadline for submitting the advance VAT return. No justification is required for this request to extend the period. If the permanent extension is approved, the pre-registration period is extended by one month.
A permanent extension of the period is also possible with a quarterly payment. In the case of a monthly permanent extension, however, it would be necessary to make a special advance payment of 1/11 of the sum of the advance payments of the previous year to the tax office. No advance payment is required for a quarterly permanent period extension.
The small business regulation can be used by any self-employed or freelance person who has turned over less than 17,500 euros in the last year. No more than 50,000 euros may be achieved in the current calendar year. For online tax filing this is important.
Small Business Taxation
The small business rule not only means that there is no need to register sales tax in advance, but also that no sales tax may be shown on invoices to customers. The pros and cons of the small business regulation should in any case be carefully weighed against each other.
The Other Aspect
On the one hand, the bureaucratic effort is reduced considerably. On the other hand, there could be larger investments for which a high input tax is due. In principle, it would be worth considering whether it would not be better to forego the small business regulation. Otherwise the input tax cannot be claimed from the tax office, which can result in the owner of the business losing a lot of money.