How does value-added tax affect corporate tax?
April 28, 2024 | 50,00 EUR | answered by Mia Köhler
Dear tax consultant,
I run a GmbH and have a question regarding corporation tax in connection with value added tax. So far, I have mainly focused on trade tax, but I am unsure how value added tax affects corporation tax.
Currently, my GmbH generates revenue that exceeds the small business threshold, so I have to pay value added tax to the tax office. I am now wondering if this value added tax also affects corporation tax and if I need to consider these taxes separately.
I am concerned that I may be calculating or paying taxes incorrectly, leading to unnecessary costs. It is important to me that my GmbH is tax compliant and that no mistakes are made when filing tax returns.
Can you please explain to me how value added tax affects corporation tax and if there are any special considerations I need to keep in mind when calculating and paying taxes? Are there potentially tax optimization opportunities to reduce the burden of taxes?
Thank you in advance for your help and support.
Kind regards,
Renata Raab
Dear Mrs. Raab,
Thank you for your question regarding corporate tax in connection with value-added tax for your GmbH. It is important to understand the relationship between these two types of taxes in order to avoid tax errors and to set up your GmbH correctly.
Value-added tax and corporate tax are two separate types of taxes that capture different aspects of the economic activity of a GmbH. Value-added tax is levied on the revenue generated by your GmbH and must be paid to the tax office. Corporate tax, on the other hand, is a tax on the profit earned by your GmbH.
Value-added tax generally does not directly affect corporate tax, as they are different types of taxes. Value-added tax is calculated and paid independently of corporate tax. However, it is important to consider revenue and value-added tax as cost factors when calculating corporate tax, as they can influence the profit of your GmbH.
Tax optimization can be achieved, among other things, through the so-called input tax deduction entitlement. As an entrepreneur with a GmbH, you usually have the opportunity to claim the value-added tax paid by you as input tax and thus reduce your tax burden. It is important to consider all relevant tax aspects and, if necessary, consult an experienced tax advisor to optimize tax benefits and avoid possible errors.
It is advisable to regularly review the tax situation of your GmbH and make adjustments if necessary to be optimally positioned for taxes. If you have any further questions or need detailed advice, I am happy to assist you.
Best regards,
Mia Köhler, Tax Advisor
