Taxes on profits from affiliate marketing
August 9, 2015 | 50,00 EUR | answered by Dipl.-Kfm. Frank-Olaf Illiges
I started participating in an affiliate program this year and am making a profit from it. But how do I deduct this for tax purposes? Do I need to register as a business for this? At the moment, I am not. And where do I need to include this in next year's tax return? Thank you for your response!
Dear inquirer,
Thank you for your inquiry, which I will gladly answer taking into consideration your question and the rules of this platform.
Please note that my response is based on the information provided, and that adding, omitting, changing the information, or the ambiguity of the information may change the tax result. Please be aware that this does not replace individual comprehensive advice.
Firstly, you must report the start of your self-employment in the form of affiliate marketing to the relevant tax office (§ 138 AO). The tax office responsible is the one in whose district your company headquarters or residence is located. There, you will be assigned a tax number and you must complete the tax registration form.
Furthermore, for your activity according to § 14 Gewerbeordnung (Trade Regulation Act), you must submit a business registration to the local business office in your city.
From a tax perspective, the income you earn from your self-employment in the form of affiliate marketing is considered income from a business operation, subject to income tax. To determine your income, you must regularly record your income and related expenses.
For the determination of your business income, you must create an income-expenditure statement for each calendar year according to § 4 paragraph 3 of the Income Tax Act (EStG) and submit an income tax return to the relevant tax office for taxation of this income.
Furthermore, your income is generally subject to value-added tax (VAT) (§ 1 paragraph 1 No. 1 Value Added Tax Act (UStG)). You must deduct the VAT at a rate of 19% from your income and remit it to the tax office. You can deduct input tax on expenses related to your income. To settle the VAT of a month, you must submit a VAT return by the 10th of the following month. You must also submit a VAT return for the calendar year. If your income is less than 17,500.00 EUR per calendar year, you can opt for the small business regulation according to § 19 UStG. Then your income is exempt from VAT.
Finally, your income is also subject to trade tax if it exceeds the allowance of 24,500.00 EUR. However, the trade tax is largely credited against your income tax.
Best regards,
Dipl. Kfm. Frank-Olaf Illiges
Tax Advisor
Am Wieksbach 55
33378 Rheda-Wiedenbrück
Phone: 05242/4055666
Fax: 05242/4055677
Email: office@illiges-steuerberatung.de
Website: www.illiges-steuerberatung.de
