- Details
- Parent Category: Business Legalities
- Created on Friday, 29 June 2007 16:37
- Last Updated on Friday, 15 February 2013 17:58
Flat Rate for Input Tax in Annual Statement
Any and all business persons that add VATvalue added tax (MwSt = Mehrwertsteuer or USt = Umsatzsteuer; colloquailly dubbed as "Märchensteuer") to their invoice know that they can deduct the VAT billed to them by other businesses – the so-called ”input tax(Vorsteuer) Such VAT that another business adds to its invoice. This is an advance to your own VAT bill at the end of the year. “. But what if your turnover was high and your investments were low? You can use a little-known flat rate – pursuant to §23 UStGUmsatzsteuergesetz (Turnover Tax Act = Value Added Tax Act) i.c.w.'in conjungtion with' or 'in Verbindung mit (abbr. i.V.m.)' This is a typical abbreviation in German legalese. §§69, 70 UStDVUmsatzsteuerdurchführungsverordnung (Implementation Turnover Tax Ordinance) . However, this relief applies only for businesses required to keep tax records and not balance sheets. If your turnover was less than € 61,356 in the previous year, you are eligible.
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A practical example: A journalist made € 60,000 plus € 9,600 turnover in 2006. He collected only € 2,000 on input tax. His VAT return would amount to a bill of € 7,600 (= € 9,600 VAT – € 2,000 input tax). If he takes advantage of the flat rate, he will be able to deduct 4.8% of his turnover or € 2,880 flat input tax. This will lead to a VAT payment of only € 6,720 instead of €7,600.
Below you will find the applicable flat for some common professions. If your trade is not listed, please consult your attorney or tax advisor.
I. Crafts
|
Bakeries: |
5.4 % of turnover |
|
Car repairs: |
9.1 % of turnover |
|
Printers: |
6.4 % of turnover |
|
Stone cutter: |
8.4 % of turnover |
|
Tailoring: |
6.0 % of turnover |
II. Retail
|
Animals and zoological demand |
8.8% of turnover |
|
Bicycles and mopeds: |
12.2 % of turnover |
|
Candy: |
6.6 % of turnover |
|
Clothing: |
12.3 % of turnover |
|
Drugstores: |
10.9 % of turnover |
|
Electrotechnical products, radio, TV, stereos |
11.7 % of turnover |
|
Flowers and plants: |
5.7 % of turnover |
|
Groceries: |
8.3 % of turnover |
|
Newspapers and magazines: |
6.3 % of turnover |
|
Shoes and shoe accessories: |
11.8% of turnover |
III. Trades
|
Hostels, hotels |
6.7 % of turnover |
|
Restaurants, bistros, bars, cafés |
8.7 % of turnover |
|
Transport of persons with cars |
6.0 % of turnover |
IV. Free Professions
|
Sculptors |
7.0 % of turnover |
|
Graphic artist |
5.2 % of turnover |
|
Painting artist |
5.2 % of turnover |
|
Freelancers for stage, film, radio, |
|
|
TV and recording studios: |
3.6 % of turnover |
|
High school teachers: |
2.9 % of turnover |
|
Journalists: |
4.8 % of turnover |
|
Writers: |
2.6 % of turnover |
Published on the old CMS: 2007/6/29
Read on the old CMS till November 2008: 196 reads
