Income surplus
December 30, 2009 | 25,00 EUR | answered by Matthias Wander
1- I have approximately 10,000 euros profit. I would like to reinvest this next year through purchasing goods for the business. Do I have to fully declare this as profit for tax purposes or is there a solution?
2- I sell toys online (in a shop and on eBay). I have an average of 2% unpaid prepayment orders. Do I need to create invoices for these orders and then cancel them?
Dear inquirer,
Thank you for your inquiry, which I would like to answer based on the information provided in a preliminary consultation.
1. Profits are to be taxed in the calendar year in which they are earned. Expenses for purchasing goods that are made in the following year do not affect the profit of the current year. Since the cash basis principle applies to income-expenditure accounting, the profit of this year could still be reduced by a down payment made on the purchase of goods this year. However, it should be noted that the down payment will only be recognized as operating expenses for tax purposes if there is a economically valid reason for the advance payment in addition to the tax planning. If such a reason is not present, the tax office will not recognize the down payment for tax purposes.
2. Since the ordered items were not delivered, there is no exchange of services for sales tax purposes. Therefore, you do not have to issue an invoice in these cases. An invoice is only required for items that have actually been delivered.
I hope this has given you an initial overview.
Best regards,
Wander
Tax consultant
