Do I have to show sales tax as a small business owner?
July 7, 2024 | 40,00 EUR | answered by Siegfried Strauss
Dear tax consultant,
I am Gertrud Evers and I am planning to start my own business as a small business owner. I have a business idea in the field of photography and have already received my first orders. Now I am wondering if I have to charge sales tax as a small business owner.
Currently, I am unsure about the exact regulations regarding sales tax for small business owners. I have heard that small business owners are exempt from sales tax under certain conditions, but I am not sure if I meet these requirements.
My main concern is to comply with the legal framework correctly and not make any errors in invoicing. Therefore, it would be very helpful for me if you could inform me whether I have to charge sales tax as a small business owner and if so, what steps I need to take for this.
I look forward to your support and thank you in advance for your help.
Sincerely,
Gertrud Evers
Dear Mrs. Evers,
Thank you for your inquiry regarding the value added tax as a small business owner in the photography industry. It is understandable that you would like to inform yourself about the legal framework in order to avoid any errors in invoicing. I am happy to explain the regulations for small businesses regarding the value added tax.
As a small business owner according to § 19 of the Value Added Tax Act (UStG), you may be exempt from the value added tax if you have generated a turnover of no more than 22,000 euros in the previous calendar year and expect a turnover of no more than 50,000 euros in the current calendar year. If you meet these requirements, you can waive the indication of value added tax on your invoices.
However, there is also a voluntary waiver of the small business rule if, for example, you have larger companies as customers who rely on input tax deduction. In this case, you can choose to indicate value added tax and register for the regular taxation procedure.
If you are exempt from the value added tax as a small business owner, you must indicate this on your invoices by stating the note "No indication of value added tax according to § 19 UStG." Additionally, you are exempt from submitting value added tax pre-registration, but you must submit an annual value added tax return.
If you find that you exceed the limits for the small business rule, you must inform the tax office and register for the regular taxation procedure. In this case, you are obliged to indicate value added tax and submit value added tax pre-registration.
I recommend coordinating with your local tax advisor to ensure that you fulfill all tax obligations correctly. I am happy to assist you with any further questions and wish you success in establishing your business in the photography industry.
Best regards,
Siegfried Strauss
