Opening a second restaurant temporarily
November 5, 2010 | 60,00 EUR | answered by Michael Herrmann
Hello,
My friend - for whom I do the accounting - has a pub in Bonn that will be closed as of 30.06.2011. However, she also already has her new pub since 11.11.2010, so both are running concurrently for several months.
How does this work in terms of taxes now? She has a tax number under which she probably submits the VAT returns for both pubs, or does she need to apply for a separate one for the second pub? Is the second pub considered a branch for the time being or are they completely separate business entities?
Thank you in advance!
Dear Mrs. Kreutzer,
First of all, thank you for your inquiry, which I would be happy to answer based on the information provided and considering your commitment in the context of an initial consultation. The response is based on the description of the circumstances. Missing or incorrect information about the actual situation can influence the legal outcome.
Regarding value added tax, a company exists because the taxation of turnover is based on the person of the entrepreneur. Therefore, all entrepreneurial activities of your friend will be consolidated and settled in one VAT return.
If a business owner has several businesses of the same type, it must be checked whether the multiple businesses constitute an economic unit. The presumption is in favor of the existence of a single business when multiple similar businesses are combined under one entrepreneur, especially if they are located in the same municipality. Businesses are considered similar when they are internally connected in terms of facts, especially economically, financially, or organizationally.
Despite similar activities, in my opinion there are two separate businesses, as they are not managed uniformly and one business will be discontinued shortly. Therefore, the restaurants should not be considered as dependent branches.
It is practical to book two accounting circles and consolidate the VAT. The tax assessment is made under one tax number. However, for the year 2011, two profit determinations need to be prepared. This approach has the advantage that a clear separation of the two restaurants is also evident from an accounting perspective.
I hope that these explanations have provided you with a sufficient overview of the situation within your commitment and remain
Yours sincerely,
Michael Herrmann
Dipl.-Finanzwirt (FH)
Tax consultant
