Ask a tax advisor on the topic of Sales tax / Turnover tax

Corrected invoice without value-added tax

October 27, 2015 | 30,00 EUR | answered by Dipl.-Kfm. Frank-Olaf Illiges

I was informed by a customer afterwards that an invoice from 2013 should be issued as exempt from sales tax instead of with sales tax (lecturing activity was retrospectively exempt from sales tax according to §4 No. 21 a) bb) UStG).

The customer's suggestion:
I will create a credit note with the current date for the amount at that time with sales tax, and at the same time, with the current date, a new invoice without sales tax.
So I will receive a refund of the sales tax from the tax office and should transfer the amount to the customer.

My problem:
The tax office will count the refund amount as profit within the income statement for the corresponding period.
Since this year I am trying to book as little profit as possible due to a fifth regulation, I am fighting for every euro that could be counted as profit.
Since I receive the money from the tax office and transfer it to the customer, there is actually no profit in reality.
Where is my misunderstanding or how can I turn the supposed "profit" back into a loss for tax purposes?

What I understand:
If I had many invoices with sales tax in this quarter, then the corrective invoice would reduce my advance payments for sales tax, because I do not pay all of the received sales tax to the tax office.
BUT, I do not have any more invoices in this quarter and through advance payments for sales tax, I have already paid all the applicable sales tax contributions to the tax office this year.
So, by issuing a credit note and a new invoice without sales tax for this quarter, I would receive a refund.

Best regards

P.S. Is such a late, retrospective exemption from sales tax actually permissible?

Dipl.-Kfm. Frank-Olaf Illiges

Dear inquirer,

Thank you for your inquiry, which I will gladly answer taking into account your input and the rules of this platform.

Please note that my explanation is based on the facts presented, and that adding, omitting, changing information, or the ambiguity of information can change the tax result. Please be aware that this cannot replace individual comprehensive advice.

Since you have stated a higher amount of value-added tax in your invoice for your service than you owe according to the VAT law, you can correct the tax statement to the recipient of the service (§ 14 c para. 1 VAT Act).

As you have already received the overcharged invoice amount, the recipient of the service is entitled to a refund of the paid VAT from the invoice correction. The correction of the invoice is only permissible once you have repaid this VAT amount to the recipient of the service. (Federal Fiscal Court decisions of 18.09.2008, VR 56/06, BStBl 2009 II p. 250, and of 2.9.2010, VR 34/09, BStBl 2011 II p. 991).

The correction of the invoice does not affect the profit according to the income statement. The VAT refund from the tax office is offset by a negative business income in the form of the repayment to the recipient of the service in the same amount.

Best regards,
Dipl.-Kfm. Frank-Olaf Illiges
Tax consultant
Am Wieksbach 55
33378 Rheda-Wiedenbrück

Phone: 05242/4055666
Fax: 05242/4055677
e-mail: office@illiges-steuerberatung.de
Website: www.illiges-steuerberatung.de