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A year-end financial statement is compiled at the end of a fiscal year. It includes the balance sheet, income statement, and, depending on the company's form, the notes to the financial statements and management report. The aim is to transparently present the financial position and business results of the company while complying with legal requirements.
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Association taxation encompasses the tax regulations governing nonprofit organizations. It involves levying taxes on income, revenues, and assets of the association, including special tax benefits for charitable purposes. The aim is to define the tax obligations of associations while promoting tax incentives for charitable activities.
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A balance sheet is a financial statement that presents a company's assets (active) and liabilities (passive) at a specific point in time. It shows the relationship between equity and debt and serves to assess the company's financial health and performance. The aim is to ensure transparency and comparability of the financial position.
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Entrepreneurship refers to the process of creating and establishing a new business or self-employment. This includes developing a business idea, planning, acquiring resources, legal formalities, and market introduction. The goal is to build a successful and sustainable business that generates profit in the long term.
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Capital assets include financial assets such as stocks, bonds, mutual funds, bank deposits, and other securities held to generate income such as dividends, interest, or capital gains. It represents a form of wealth that can be invested to generate financial returns.
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Corporate income tax (Körperschaftssteuer) is a tax on the income of legal entities such as corporations (e.g., GmbHs, AGs). It is levied on the company's profits and collected by the tax authorities. The goal is to tax the profits generated by corporations, similar to income tax for individuals.
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A cross-border commuter is an individual who resides in one country but works in another, regularly crossing the border. In the context of a tax advisor, this involves advising on income taxation in both countries and applying double taxation treaties to avoid dual taxation.
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Double taxation refers to the situation where the same income or assets are taxed in multiple countries simultaneously. This often occurs with cross-border activities. Double taxation agreements between states aim to avoid or mitigate this double taxation by establishing clear rules for tax allocation.
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ELStAM (Electronic Wage Tax Deduction Characteristics) are digital data used for calculating income tax in Germany. They include personal information such as tax class, allowances, and religious affiliation of an employee. ELStAM are electronically exchanged between employers, tax authorities, and the Federal Central Tax Office to ensure accurate wage tax deduction.
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Gift tax is a tax levied on the transfer of assets without direct compensation between living persons. It is based on the value of the gift and the degree of relationship between the donor and the recipient. The goal is to tax transfers of wealth and ensure that the tax authorities are involved in such transactions.
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An income tax return is an official document in which a person discloses their income and expenses for the tax year to the tax authority. It is used to determine the income tax owed or refundable and includes details such as salary, capital gains, deductible expenses, and special deductions.
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Inheritance tax is a tax levied on the acquisition of assets by heirs after the death of the deceased. The amount of tax depends on the value of the inherited assets and the degree of kinship between the deceased and the heirs. The goal is to involve the tax authorities in the transfer of wealth.
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Input tax (Vorsteuer) is the value-added tax (VAT) that a company pays on purchases of goods and services. This tax can be deducted from the VAT that the company collects on its own sales. The input tax deduction thus reduces the company's tax burden and is taken into account when calculating the amount payable to the tax authorities.
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Other questions for a tax advisor
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Payroll is the monthly breakdown of salary payments to employees. It includes gross wages, deductions such as taxes and social security contributions, and net wages. Payroll documents all relevant information regarding compensation and serves both the employer for accounting purposes and the employee as a proof of salary.
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The profit and loss statement (P&L) is part of the annual financial statement that compares a company's revenues and expenses within a fiscal year. Tax advisors use the P&L to determine taxable profit, make tax optimizations, and assess the financial performance of the company.
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Real estate taxation encompasses the taxation of land and real property. It can include property tax, real estate transfer tax, inheritance tax, as well as income tax on rental income. The goal is to regulate the taxation of real estate ownership and transactions and generate revenue for governmental purposes.
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"Rental and leasing" in tax context refers to income derived from leasing or renting out real estate or land to third parties. Tax advisors assist in accurately recording, invoicing, and utilizing tax benefits such as depreciation and deductible expenses. The goal is to accurately determine the tax burden.
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Value-added tax (VAT) is an indirect tax imposed on the sale of goods and services. Businesses calculate it on their sales and remit it to the tax authorities. VAT is ultimately borne by the final consumer and is typically included in the selling prices.
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A severance payment is a one-time monetary compensation that an employee receives from the employer upon termination of employment. It serves as compensation for the loss of the job and is often paid in cases of redundancy or as part of a termination agreement. The aim is to ease the employee's financial transition.
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Tax advisor fees are the charges that a tax advisor levies for consultation, preparation of tax returns, accounting services, and other tax-related tasks. These costs vary depending on the complexity of tax matters and the type of services provided by the tax advisor, and they may be tax-deductible as business expenses.
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Tax brackets are categories into which employees are classified based on their personal situation to determine the amount of income tax. In Germany, there are different tax brackets (e.g., I, II, III, IV, V, VI), which influence the tax burden depending on marital status, child allowances, and other factors.
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A tax return is an official document where an individual or business reports income, expenses, and other tax-related information to the tax authorities for a tax year. The goal is to fulfill tax obligations, calculate tax liabilities, and potentially claim refunds for overpaid taxes or settle tax debts.
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Trade tax (Gewerbesteuer) is a tax levied on the income of commercial enterprises. It is determined and collected by municipalities. The amount of tax depends on the business income and a local multiplier (Hebesatz). The goal is to finance local tasks through the economic performance of local businesses.
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Value-added tax (VAT) is a consumption tax imposed on the sale of goods and services. It is levied at each stage of production up to the final consumer, with only the value added being taxed. Businesses deduct the input tax they have paid themselves, so the tax burden ultimately falls on the final consumer.
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