Which trade to register?
April 5, 2016 | 30,00 EUR | answered by StB Patrick Färber
Dear Sir or Madam,
I would like to start my own business offering cosmetic services, in my own home. Initially, it will be part-time as I am currently covered by my husband's family insurance and expect to generate a monthly revenue of €1000 at the beginning of the opening on 1st October 2016. In the following year, I will most likely exceed a turnover of €17,500.
Now my question: My husband works full-time, I have a mini job, and would like to remain covered by family insurance for the time being... Which type of business would you recommend for me? Should I start with a small business or go straight to a regular one? Expenses for the start-up will begin in the next few weeks, so should I already register a business? The opening is as mentioned above on 1st October 2016.
Thank you in advance.
Best regards.
Dear questioner,
Based on your information and considering the amount of your investment, I can advise you as follows to seek further advice - preferably on-site:
Tax component:
- From a tax perspective, a business is a business, whether it is a "small business" or "normal". There is no "choice" here. You must notify the tax office of your activities by sending the "Tax Questionnaire for commencing a commercial activity" and report it. This should be done from the start with the first preparatory actions. You must also inform the trade office.
You have a tax-free allowance of EUR 24,500.00 PROFIT (not turnover) for trade tax.
- If you operate the business in your own home (ownership, not rent) in a separate room, it should be noted that if certain value limits are exceeded, it becomes a necessary business asset, and any increase in value in land and buildings when the business is later abandoned must be taxed as a cessation gain.
- As for VAT, as you indicated, there is the small business regulation. You mention that you will eventually exceed the limit, so it may be worth considering giving up the small business regulation so that you can deduct input tax from purchases.
Health insurance:
You must coordinate this with the health insurance company based on specific projected figures (turnover and profit). However, you can only remain in family insurance if the sum of mini-job and part-time self-employment does not exceed 1/7 of the monthly reference amount, in 2016 this is EUR 415 PROFIT per month (not turnover).
If you are essentially self-employed full-time later on, you will be excluded from family insurance - possibly retroactively. Based on your description, I estimate that you will not be able to remain in family insurance once your business is fully operational. Clarify this with your health insurance beforehand, as there are different time/profit criteria for distinguishing between part-time and full-time self-employment that would be too extensive to cover here.
If family insurance is important to you, you should keep the business on a "low flame".
I hope this information has been helpful for further research!
Best regards,
Tax consultant Patrick Färber
