What tax obligations do I have as a small business owner?
April 14, 2024 | 50,00 EUR | answered by Georg Nitsche
Dear tax advisor,
I am Katja Baradari and I recently founded my own small business. I operate an online shop where I sell handmade products. I have registered as a small business owner according to § 19 UStG and am therefore exempt from sales tax. Now I am wondering what tax obligations I have as a small business owner and what I need to pay special attention to.
I am currently very unsure if I am doing everything right and not making any tax mistakes. I want to avoid being confronted with unexpected tax payments at the end of the year. Therefore, it is important for me to know and fulfill all relevant tax obligations correctly.
Could you please explain to me what record-keeping obligations I have as a small business owner and how I should properly document my income and expenses? Do I need to submit regular sales tax returns or is this obligation completely waived for me as a small business owner?
Furthermore, I am interested to know if there are any special tax benefits or advantages that I as a small business owner can benefit from. Are there specific ways to save taxes or reduce the tax burden?
I would be very grateful if you could provide me with detailed information and recommendations on this matter, so that I can fulfill my tax obligations as a small business owner correctly.
Thank you in advance for your support.
Best regards,
Katja Baradari
Dear Mrs. Baradari,
Thank you for your inquiry regarding your tax obligations as a small business owner according to § 19 UStG. I understand that it can often be confusing for new entrepreneurs to navigate the tax regulations. I would be happy to help answer your questions and provide clarity regarding your tax obligations as a small business owner.
As a small business owner according to § 19 UStG, you are exempt from VAT as long as your turnover in the previous calendar year did not exceed 22,000 euros and is not expected to exceed 50,000 euros in the current calendar year. This means that you do not have to show VAT on your invoices and do not have to submit VAT returns. However, you must indicate the small business exemption on your invoices.
In terms of your record-keeping obligations as a small business owner, it is important that you properly document all income and expenses. This includes invoices, receipts, bank statements, and any other documents that support your business transactions. It is advisable to maintain a simple accounting system to keep track of your finances. Thorough documentation is important in order to be able to provide all necessary documents in the event of a tax audit.
While small business owners have fewer tax obligations than regular businesses, there are still opportunities for you to save taxes and reduce your tax burden. For example, you can deduct business expenses such as office supplies, advertising costs, or travel expenses. Depreciation of business assets can also reduce your tax liability. It may be beneficial to seek advice from a tax advisor to maximize all available tax opportunities.
I hope that my explanations have been helpful and have provided you with more clarity regarding your tax obligations as a small business owner. If you have any further questions or need assistance, please do not hesitate to contact me.
Best regards,
Georg Nitsche
