Ask a tax advisor on the topic of Other questions to tax advisors

Is commission taxable as additional income?

May 27, 2010 | 15,00 EUR | answered by Michael Herrmann

Dear Sir or Madam,

I would like to get involved in a dating network as a side job. I will provide the domain and receive a commission for each member who subscribes there. Do I need to register my own business for this? Do I need a VAT ID? If so, where can I get this? What exactly do I need to pay taxes on and do I need to report this somewhere or just include it in my tax return? Can you help me with this?

Kind regards,

C.E.

Michael Herrmann

Dear inquirer,

First of all, thank you for your inquiry, which I would be happy to answer based on the information provided and in the context of your initial consultation. The response will be based on the facts presented. Missing or incorrect information about the actual circumstances can affect the legal outcome.

By brokering subscriptions, you are generating commercial income. Therefore, registering your business with the business office of your municipality is essential. The business office will inform the tax office about the registration, which will then contact you with a questionnaire for tax registration. This will address basic tax questions.

The profit from this activity is taxable, meaning the surplus of commissions over the operating expenses related to your activity. The profit will be declared in your tax return on Annex G. Additionally, a profit determination should be included, showing how the profit is calculated.

Value added tax is likely not yet applicable, as you are initially operating as a small business owner. This is the case as long as your annual turnover does not exceed €17,500. Until then, you do not need to apply for a VAT ID number.

I hope that these details provide you with an initial overview of the situation within the scope of your activities.

Sincerely,

Michael Herrmann
Dipl.-Financial Economist (FH)
Tax Advisor