high profit
January 18, 2011 | 40,00 EUR | answered by Dipl.BW/SB Ulrich Stiller
Hello,
my question: I operate an accounting service and one of my clients (a forwarding company) increased their profit from 10,000 to 73,000 in 2010. Now they are apparently required to prepare a balance sheet and will have to pay a significant amount of income tax... It is a sole proprietorship. In the following year, the profit will be below 50,000 euros again. What can she do now to avoid preparing a balance sheet and possibly reduce her profit? Can she, for example, create reserves?
Kind regards!
Dear client,
Thank you for your inquiry, which I would like to answer based on your information and in the context of your commitment in a first consultation as follows:
Your customer uses the profit determination according to § 4 para. 3 EStG (income-expenditure accounting).
In 2010, the 50,000 euro profit limit of § 141 para. 1 no. 4 is now exceeded. However, this does not necessarily lead to the obligation to keep accounts and to prepare balance sheets from the year 2010 onwards. According to § 141 para. 2 AO, the obligation to keep accounts and prepare balance sheets always begins from the start of the financial year following the announcement of the notification by which the tax authority has pointed out the beginning of this obligation.
In your case, the tax office should have notified in writing in 2009 about the obligation to keep accounts from 2010, which apparently did not happen. Therefore, your customer can continue to determine the profit in 2010 using income-expenditure accounting according to § 4 para. 3 EStG. The tax office could therefore only demand the obligation to keep accounts from 2011 if a notification of this obligation is made in 2010 by the tax office.
As mentioned, the obligation to keep accounts and prepare balance sheets only arises in the following year after a request by the tax office.
I hope my explanations have been helpful.
Sincerely,
Ulrich Stiller
Tax advisor/Dipl. Betriebswirt
