Do I have to pay sales tax on my online sales?
August 3, 2023 | 40,00 EUR | answered by Oliver Götzinger
Dear tax advisor,
I have been operating an online shop for some time now, through which I sell various products. However, I have not yet paid any sales tax as it is unclear to me whether it applies to my online sales. I am unsure if I am exempt from sales tax as a small business owner, or if I still need to pay it.
Currently, I regularly generate income from my online sales, but have not yet paid any sales tax. Since I am not knowledgeable enough about sales tax, I am concerned that I may be violating laws and facing legal consequences.
My question to you is: do I as an online seller have to pay sales tax, and if so, how much? Are there any exceptions or regulations that apply to me as a small business owner and exempt me from sales tax obligations? I would greatly appreciate it if you could provide clarity on this matter so that I can fulfill my tax obligations correctly.
Thank you in advance for your assistance.
Sincerely,
Jens Eiserfelder
Dear Mr. Eiserfelder,
Thank you for your inquiry regarding the sales tax obligation as an online seller. It is important that you address this issue to prevent possible legal consequences. I would be happy to help you and provide you with clarity.
In general, all entrepreneurs operating in Germany are subject to sales tax obligation if they provide taxable services. This also applies to online sellers who sell products over the internet. Sales tax is levied on the net amount of sales generated and must be regularly remitted to the tax office.
However, as a small business owner, you have the option to be exempt from sales tax if your annual turnover is below certain thresholds. According to § 19 UStG, you can be considered a small business owner if your previous year's turnover does not exceed 22,000 euros and your projected turnover for the current year is not expected to exceed 50,000 euros. In this case, you can be exempt from sales tax obligation and do not have to show or remit sales tax.
If you are operating as a small business owner, you must include the note "Tax-free according to § 19 UStG" on your invoices. Otherwise, there could be a repayment of sales tax. It is important that you keep an eye on your turnover limits and if necessary, timely register for sales tax obligation if you exceed the limits.
If you do not qualify as a small business owner, you must remit sales tax at a rate of 19% on your sales. It is advisable to regularly review your sales and accordingly pay the sales tax to the tax office.
I hope that I was able to help you with this information. If you have any further questions or need assistance, I am happy to help.
Best regards,
Oliver Götzinger
Tax advisor
