What tax obligations do I have as a start-up founder?
February 26, 2024 | 40,00 EUR | answered by Fanni Siebert
Dear tax consultant,
I am planning to start a business in the field of event planning and I am facing the question of what tax obligations I will have to fulfill. I have been working as an employee so far and therefore have no experience with tax matters as a self-employed individual.
My business plan involves planning and organizing small to medium-sized events. I intend to work with various service providers and offer my services to both individuals and companies. I plan to start on my own initially and hire employees as needed over time.
My main concern is that I may not fulfill the tax obligations correctly as a new business owner, and therefore risk penalties or back payments. I want to do everything right from the start and manage my finances properly to avoid potential problems.
Therefore, my question is: What tax obligations do I have as a new business owner in the field of event planning? Do I have to pay sales tax or trade tax, and if so, how is the billing and payment done? Are there any specific tax regulations or benefits for new business owners in my industry? What should I consider in my accounting to avoid tax mistakes?
Thank you in advance for your support and advice.
Best regards,
Selma Busch
Dear Mrs. Busch,
Thank you for your inquiry regarding your planned business start-up in the field of event planning. As a tax advisor with extensive experience in business start-ups, I would be happy to assist you and explain the most important tax obligations and aspects for your project.
As a self-employed individual in the field of event planning, you have various tax obligations to fulfill. The most important ones include VAT and trade tax. As a service provider offering services that are subject to taxation in Germany, you are likely to be liable for VAT. This means that you will need to calculate VAT on your services and remit it to the tax office. You should therefore consider whether you want to opt for VAT in order to claim input tax deductions.
Trade tax is levied if you operate a trade. Since you offer services as an event planner and work with various service providers, this constitutes a commercial activity. Therefore, you may have to pay trade tax, depending on your profit situation and the location of your business.
There are various special tax regulations or benefits for start-ups in your industry. For example, you can take advantage of the small business regulation if your turnover was below €22,000 in the previous year and is expected to be below €50,000 in the current year. This could exempt you from VAT. Additionally, there are various support programs and financing options available for start-ups that you can take advantage of.
To avoid tax errors, proper bookkeeping is essential. You should carefully document all income and expenses and regularly update your accounting records. It is recommended to use a professional accounting program or hire a tax advisor to prepare your tax returns to avoid potential errors.
I hope this information has been helpful to you and I am available to answer any further questions you may have. I wish you success with your business start-up in event planning and am happy to assist you with my expertise.
Best regards,
Fanni Siebert, Tax Advisor
