Small business regulation
November 29, 2010 | 30,00 EUR | answered by Dipl.BW/SB Ulrich Stiller
Good day,
I have a question regarding the small business regulation, as I am considering starting a business on January 1, 2011. Beforehand: I am married, my wife works full-time, earns a gross monthly salary of 2403 euros, tax class 3. I am unemployed, do not receive unemployment benefits, so no benefits. My wife had to file for private insolvency in 2006, which will be completed in June 2012. Currently, 217 euros are being garnished directly from her salary. My question now is: I obviously have to inform the trustee that I am starting a business. To my knowledge, the garnishment would then be around 527 euros. Furthermore, I would also have to insure myself for health care. How much could I earn at most in this situation (profit? / turnover would be max. 17500 euros?) to remain in the small business regulation and would my wife's tax class need to be changed? Does this mean that there may be additional payments due in the tax return at the end of the year? And finally: Does it even make sense financially considering the complicated situation?
Dear inquirer,
Thank you for your inquiry, which I would like to answer based on the information provided and in the context of your involvement in an initial consultation as follows:
In principle, your wife's personal bankruptcy does not directly affect you. However, if you are jointly liable with your wife, the creditor can demand the entire amount from you. This cannot be assessed without detailed knowledge.
The small business regulation originates from the Value Added Tax Act (UStG) and is regulated in § 19. According to this regulation, your total turnover at the time of business establishment on 1.1.2011 must not exceed 17,500 euros in the founding year. Then you are exempt from the obligation to pay value added tax, meaning you are not allowed to separately show value added tax on your invoices. However, you have the option to opt for regular taxation, but you will be bound to this option for 5 years.
For income tax purposes, you must pay tax on the profit, which is the surplus of business income (revenue) over business expenses. Depending on your personal income tax rate, income tax will be due on the profit, which may result in a tax payment. However, you can request the determination of income tax payments, due on 10.3.,10.6.,10.9. and 10.12., so there may not be a tax payment due.
I hope this information has been helpful to you.
Best regards,
Ulrich Stiller / Dipl. Betriebswirt
