Companies that had a maximum turnover of EUR 1,000 in the previous year can be exempted from submitting a VAT return. At the same time, this means that no advance payments have to be made. Anyone who has a previous year’s payment between 1,000 and 7,500 euros must submit and pay the VAT advance return quarterly. If the payment burden is higher, you have to pay monthly.

The Entrepreneurs

According to § 18 Abs. 2a UStG, entrepreneurs who have a surplus of 7,500 euros from the previous year have the right to choose. Instead of the calendar quarter, you can also bill on a monthly basis. The company then has to submit the pre-registration for the first time by February 10. The corresponding choice then applies for the entire calendar year. The process of online tax filing comes perfect there.

The pre-registration must be submitted to the responsible tax office by the tenth day after the pre-registration period has expired (Section 18 (1) UStG). In principle, companies can apply for a permanent extension. This must be sent informally and without a reason to the tax office.

  • The application is usually approved and gives dealers one month more time. However, companies must make a special advance payment of 1/11 of the total advance payment of the previous year.
  • A corresponding extension must also be requested for the quarterly pre-registration. In this case, however, the tax office waives an advance payment.

The entrepreneur must pre-register the sales tax online and then pay it. In advance, this must be determined independently through a self- assessment – this meant a lot of work, which is why many entrepreneurs use the permanent extension.

Target and actual taxation

Sales tax is regularly subject to target taxation (“taxation according to the agreed remuneration”). Specifically, this means that as soon as the invoice has been sent to the recipient, the sales tax must be registered and paid.

  • With sales tax, a distinction is made between actual and target taxation.  The latter requires a certain amount of liquidity.
  • With sales tax, a distinction is made between actual and target taxation. The latter requires liquidity.
  • When the recipient pays the bill is irrelevant. In most cases, the entrepreneur has not yet received his money and still has to make a payment to the tax office.

In the actual taxation is just the opposite:

The payment to the tax authority must take place only if the customer’s account and paid has. Accordingly, the sales tax is only to be indicated in the sales tax advance notification. In this case, we speak of a collected fee. Colloquially, the term “VAT received” is also used.

The actual taxation can only be claimed if the annual turnover below 500,000 euros or, the company is exempt from the obligation to keep accounts.

Input tax surplus: reimbursement by the tax office

The input tax surplus is the opposite of the payload. For this reason, the same formula is used:

  • Sales tax – input tax = payment burden or input tax surplus if the result is negative

In other words: If the input tax on purchase was higher than the sales tax from the continuation, there is an input tax surplus.