UG haftungsbeschränkt translates to "limited liability company" in English.
November 14, 2012 | 50,00 EUR | answered by Dr. Yanqiong Bolik
Dear tax consultant,
My name is Tobiasz Scibiorski. I intend to establish a limited liability company (UG haftungsbeschränkt) starting in Jan. 2013.
Unfortunately, when it comes to taxes, I am a blank slate.
The core business will be arranging transportation orders in the freight transport sector (liquid food products).
I have some questions regarding tax payments and calculations.
I would like to set aside taxes in advance on a daily savings account.
How can I calculate how much tax is due per transport order/profit? (Please provide example calculations.)
As a UG haftungsbeschränkt, I will pay myself a salary (similar to an employee?)
Will this be deducted before or after trade and corporation tax from the final profit for the company?
To ensure my liquidity in the beginning, I do not want to take out a loan but rather run the receivables through a factoring company.
Will the factoring fees be deducted from the profit for the company or will the full profit amount be taxed according to the invoice to customers?
Is there any advice you would like to give me?
I would greatly appreciate detailed assistance.
Best regards,
Tobiasz Scibiorski
Dear Mr. Scibiorski,
Thank you for your inquiry, which I am happy to answer taking into account your commitment and the rules of this platform.
Please note that my explanation is based on the facts presented, and that adding, omitting, changing information, or the ambiguity of the information can change the tax result.
- I want to set aside taxes in advance on a savings account. How can I calculate how much tax will be due per transport order/profit? (Please provide example calculations as well.)
The UG is mainly liable for 3 types of taxes: Value Added Tax, Corporate Income Tax, and Trade Tax. According to your tax registration questionnaire, the responsible tax office will inform you about the frequency of the VAT pre-registration. The VAT prepayment is also to be made according to this frequency. The calculation of the VAT prepayment is as follows: VAT from taxable turnover - deductible input tax from received invoices = prepayment amount (if positive) / refund amount (if negative). The UG also has to make corporate income tax prepayments and trade tax prepayments. The prepayment amounts are determined by the tax office in the prepayment notice. The prepayment notice in the year of establishment is based on your estimation. If it turns out that your business is doing better than estimated, higher taxes will likely be due after the end of the fiscal year. Taxes are not calculated per order. It depends on how much the UG earns in taxable business income in a fiscal year and how high deductible expenses are. So, Business income - Business expenses = Profit (if positive) / Loss (if negative). A profit incurs 15% corporate income tax plus solidarity surcharge. The trade tax is calculated based on the business profit, which is generally close to taxable profit in terms of corporate income tax.
- As a limited liability UG, if I pay myself a salary (similar to an employee), will it be deducted from the final profit for the company before or after trade and corporate income tax?
An appropriate salary for a shareholder-managing director is a deductible business expense. The UG must submit wage tax pre-registration, withhold wage tax, and remit it to the relevant tax office.
- To ensure my liquidity at the beginning, I do not want to take out a loan but rather run the receivable through a factoring company. Will the factoring fees be deducted from the profit for the tax authorities, or will the full profit amount according to the invoice to the customer be taxed?
From a tax perspective, costs related to factoring are deductible. So, the basis for income tax (corporate income tax and trade tax) is not the invoice amounts to your customers.
- Is there anything you would like to advise me on?
You should have your sales tax treatment assessed. For brokerage services related to goods transport, there are several special regulations to consider.
Your salary should be reasonable. A written employment contract should be in place before starting salary payments. Otherwise, the tax authorities may not recognize salary payments as business expenses. Additionally, you should have the German pension insurance determine whether your employment with the UG is subject to social security contributions.
Regarding factoring, you should seek advice on how to present this in the balance sheet. In commercial law, there are several regulations to consider regarding the presentation of receivables.
I hope this helps provide you with an overview.
If there are still uncertainties, please feel free to use the inquiry function.
Best regards,
Dr. Yanqiong Bolik
Tax Consultant
Bildstöckle 6, 70567 Stuttgart
Tel: +49 (0)711 / 2132 1815
Email: info@zdbz.de
www.steuerberatung.zdbz.de
