As an entrepreneur, the regular registration of the tax collected serves in particular to reduce payment defaults or payment difficulties of the entrepreneur. The so-called sales tax advance notification is intended to show the tax office how much sales tax a company has received monthly or quarterly and therefore has to be paid to the tax office. The rhythm of the advance VAT return is usually specified by the tax office and is based on the amount of the tax in the previous year.
What is the VAT return?
By means of the advance VAT return, the entrepreneur calculates his VAT and input tax himself and then sends this to the tax office. In general, every entrepreneur who carries out a commercial or self-employed activity must submit an advance VAT return and is obliged to submit this according to §18 UStG . Exceptions only apply to small businesses and certain professional groups that are exempt from sales tax.
How does the advance VAT return work?
Before the advance VAT return can be made, entrepreneurs must first register for the certificate . The authentication is usually divided into three steps:
- Registration takes place via the Elster program (www.elsteronline.de). In the course of registration, the tax number and personal identification number are first required.
- After successful registration, an email with a link for confirmation will be sent
- Finally, about two weeks later, the code for the authentication will be sent by post.
In the actual advance notification, the tax office is informed how much sales tax has been incurred and how much input tax has already been paid. The input tax, i.e. the sales tax that has already been paid, is reimbursed by the tax office. The sales tax, which was received through the provision of the services, must be paid. The VAT payable load can be determined by subtracting the two factors.
In April, an entrepreneur generates a turnover of 10,000 € plus 1900 € VAT with sales of cosmetic products. In addition, products worth € 1000 plus € 190 VAT were purchased from another company. In the pre-registration for April, the net sales of € 10,000 and the applicable VAT of € 1,900 must be stated. In addition, the already paid input tax of € 190 can be reclaimed to the other company. This results in a payment of € 1,710 for the month of April towards the tax office.
Difference between UStVA and VAT return
Anyone who is subject to sales tax knows the procedure: within the framework of the UStVA (= sales tax advance notification), the sales tax payable is determined for a certain period of time, for example for three months, and transferred to the tax office. In relation to the entire year, however, the relevant reports still have to be supplemented with the VAT return. But what exactly is it? And what is the difference between the two types of reporting?
According to Topbbacolleges, the VAT return is actually a type of tax return. In contrast to the income tax return, however, this relates to sales taxes. It is characteristic here that this special form of tax return must be made not only by companies subject to VAT, but also by small businesses.
With regard to the remaining points – apart from the period mentioned in each case – there are no significant differences between the UStVA and the annual report. In both cases, the point is to compare sales tax and input tax .
Companies that regularly submit their UStVA here anyway and pay the tax accordingly usually do not have to expect back payments. After all, the respective tax liability was paid at the end of the respective accounting period. If subsequent corrections have to be made or had to be made, a subsequent payment may be made in the context of the VAT return
Who has to submit an advance VAT return?
In principle, every entrepreneur is obliged to submit a tax return for the past calendar year. This must be submitted to the responsible tax office by the 10th day after the pre-registration period has expired . However, this regulation does not affect everyone – small businesses are exempt from submitting a sales tax return if their turnover does not exceed € 30,000 and the tax office does not ask them to submit a declaration by sending a form.
Which pre-registration period (year, calendar month or calendar quarter) applies, results from the amount of tax liability.
UStVA for small businesses
As already mentioned, small businesses, among others, are also obliged to submit their sales tax return to the tax office once a year. But which regulations actually apply in connection with the UStVA?
The current legal requirements on this topic can be found in the Sales Tax Act §19 . Among other things, you can read here who is exempt from submitting advance VAT returns .
One thing is certain : entrepreneurs who want to benefit from the small business regulation (and thus from the exemption from the UStVA) must not have earned more than 17,500 euros in the previous year . In addition, sales of more than 50,000 euros may not be achieved in the coming year . The use of the small business regulation must also be noted on the invoices issued.
Not having to submit a UStVA sometimes offers the respective small business owners a number of advantages. This eliminates the bureaucratic effort of submitting your reports on the relevant dates and having to book the respective receipts beforehand.
The disadvantage : who does not file a VAT return, the VAT that may under its incoming invoices are due not claim.
Accordingly, taxpayers also have the option of consciously opting out of the small business regulation. In this context, the questionnaire for tax registration must be filled out and sent to the responsible tax office. Anyone who then shows sales tax on their invoices – regardless of the annual turnover – and pays this accordingly to the tax office, is also entitled to claim the sums that arise in connection with the input tax paid.
The decision against the small business regulation is fixed for a period of five years and cannot be revoked.