Does the type of taxation affect the accounting obligation?
Anyone who has to pay taxes must also keep accounts. However, the company has the choice between target taxation and actual taxation . Respectively, every company is fundamentally obliged to pay target taxation, but can make actual taxation on request. The difference between the two tax rates has an impact on the company’s liquidity .
With this variant, the sales tax due is transferred to the tax office immediately after the invoice has been sent to the customer . The date of the invoice is decisive for this, not the actual receipt of payment by the customer.
In the case of actual taxation, sales tax is only paid to the tax office after the customer has received payment .
Advantage of the actual taxation
According to Definitionexplorer, the big advantage is that the company does not have to pay the sales tax in advance, but only pays when the customer’s money has been received. This results in higher liquidity. This is a great advantage, especially for small companies.
Conditions for the actual taxation
There are three prerequisites for performing the actual taxation:
- The company must not be required to be accounted for, i.e. it must be below the sales and profit limit of € 600,000 / € 60,000.
- It has to be a freelancer .
- The company is subject to accounting (GmbH, OHG, UG) but in the last accounting year it was below the turnover limit of 600,000 euros (from 01.01.2020) .
Violations and penalties in the event of a violation of the accounting obligation
What is the penalty for a breach of the accounting obligation? If a company violates the accounting obligation and becomes insolvent , there is a risk of a fine or imprisonment for bankruptcy and violation of accounting obligations. If a company does not comply with the accounting obligations stipulated by tax laws, it faces a penalty. It is even a criminal offense that is regulated in accordance with Section 283 of the Criminal Code.
Anyone who ignores the obligation to keep books, but does not become insolvent, faces a penalty according to §§ 369-412 AO.
Structure of the accounting
Accounting includes the components inventory , inventory and balance sheet . Note : The inventory determines the inventory in the company, which is reflected in the balance sheet. The balance sheet is broken down into assets as assets of a company and liabilities as sources for assets in the form of equity and debt . The accounting records all current business transactions that lead to changes in the balance sheet. The changes are recorded on accounts, which are divided into active and passive accounts.
A business transaction always affects at least two accounts. You always book “debit to credit”. Accounts are divided into stock accounts , profit accounts as well as general and personal accounts; all accounts are recorded in the chart of accounts . The books of the accounting are divided into the land register as a journal, the general ledger with all G / L accounts and sub-ledgers as explanations of certain G / L accounts. Every business transaction is recorded in two books, which is why we speak of double-entry accounting.
Form, scope & content
The accounting may be carried out in electronic form or in paper form . It should be noted that in the course of today’s digitization, certain regulations must be observed. Documents cannot simply be scanned and originals disposed of. Many documents are only valid if they are kept in the original and can be shown on request (evidential value). E-mails must be saved in the original, including all attachments. A saved paper printout and a deleted email are also not permitted.
The accounting must be done according to the regulations of the principles of proper accounting ( GoBD ). These principles were formulated and explained by the Federal Ministry of Finance in a letter dated November 14, 2014.
It is important that all bookings and records are made completely, correctly, in a timely and orderly manner. This means that the accounting contains all business transactions without gaps . Neither can be added or omitted. All bookings must be made factually and formally correctly and must also be booked promptly.
In connection with accounting, questions arise again and again, especially from company founders who are not sure how best to do the accounting. Or whether they are even subject to accounting requirements. The safest solution is definitely to get advice from a tax advisor, who can also help with handling the various taxes and duties. In addition, he can draw up the EÜR or the balance sheet at the end of the year. Good accounting software helps to book all documents correctly and properly during the financial year and also to create outgoing invoices correctly . It also makes it easier for inexperienced accountants to maintain an overview and, in the end, makes it easier to transfer all the necessary data to the tax advisor and the tax office.