Small business rule determination of turnover
December 16, 2013 | 50,00 EUR | answered by Peter Lipp
I have a question regarding the small business regulation.
I intend to carry out the following activities:
Purchase of Paysafecards (with real money & virtual currency) with which I acquire Amazon vouchers
Sale of Paysafecards for virtual currency
Sale of Amazon vouchers for real money and virtual currency
Purchase and sale of virtual currency for real money
Additionally, I am currently renting out garage spaces, but the income is less than 17,500 € per year.
To what extent will the above-mentioned activities be taken into account for the turnover limit for small businesses? When purchasing Paysafecards, Amazon vouchers, and trading with virtual money, no VAT is shown on the purchase, and in my opinion, this should not be taken into account for the turnover limit regarding VAT liability.
I want to avoid becoming liable for VAT through the above-mentioned activities for my rental business, the expected income from the above services is estimated to be > 17,500 € per year.
Furthermore, the question arises how I should declare the activities when registering the business. Since everything is carried out exclusively over the internet, would the term "internet services, trading with virtual goods" be correct?
I thank you in advance for your response.
Dear inquirer,
I am happy to answer your question as follows:
The small business regulation according to § 19 UStG applies only to taxable transactions. The situations you described do not involve a taxable exchange of services. For example, when buying an Amazon voucher for €25 for €25, there is no taxable transaction. The taxable event occurs only when the voucher is redeemed. It is important to determine in which area the service is provided in order to achieve economic success. For instance, if you buy vouchers for €20 and sell them for €25, there is a service involved, which would be considered a taxable transaction under the small business regulation. Therefore, you need to categorize your business transactions into taxable exchanges of services and non-taxable exchanges of payment methods. Only the taxable services are included in the turnover limit of the small business regulation.
When renting out garages, it is important to determine whether this is done on a commercial or private basis. Criteria for commercial activity include the intention to make a profit or engaging in economic activities independently and continuously. If it is considered commercial activity, these transactions also fall under the small business regulation, as the rental of parking spaces for vehicles is not VAT exempt under § 4 No. 12 sentence 2 UStG.
When assessing whether the turnover exceeds the €17,500 limit, all the entrepreneur's turnovers must be added together.
In summary: if there are no taxable transactions from voucher sales, the small business regulation can be applied to the rental of garage parking spaces.
Please feel free to reach out if you have any further questions.
