How can I correctly calculate the input tax?
December 4, 2022 | 40,00 EUR | answered by Quentin Reuter
Dear tax consultant,
I have a question regarding the calculation of input tax and I hope you can help me. I am self-employed in the online retail sector and have recently realized that I may have made errors in calculating my input tax.
To give you some background: I have purchased various goods in the past few months to resell them. I have also paid the corresponding value-added tax. Now I am wondering how I can correctly calculate the input tax in order to later deduct it from the value-added tax.
My current situation is that I am unsure if I have taken all relevant expenses into account when calculating the input tax. I want to ensure that I do not make any mistakes and do not risk having to make tax repayments.
My concerns are that I may have claimed too little input tax and as a result may have to make too high tax payments. I would like to understand how I can correctly calculate the input tax in order to optimize my tax burden.
Therefore, my question to you is: How can I correctly calculate the input tax in order to later deduct it from the value-added tax? Are there any specific regulations or special considerations that I should be aware of? What documents and evidence do I need to have in order to correctly calculate the input tax?
I thank you in advance for your help and look forward to your response.
Best regards,
Ralf Hirschfeld
Dear Ralf Hirschfeld,
thank you for your question regarding the calculation of input tax in the context of your self-employment in online trading. It is important to ensure that you calculate the input tax correctly in order to avoid any tax disadvantages. Therefore, I will explain in detail how to correctly calculate the input tax and what special considerations need to be taken into account.
First of all, it is important to understand that the input tax is the value-added tax you pay when purchasing goods or services. You can later deduct this input tax from the VAT you receive from your customers. The remaining amount is then the VAT that you must remit to the tax office.
To calculate the input tax correctly, you should first collect all purchase invoices that show the VAT. These invoices should contain all relevant information, such as your name, address, supplier's address, delivery date, type and quantity of goods delivered, total amount, and the VAT amount. It is important that the invoices are issued correctly so that you can claim the input tax.
In addition to the purchase invoices, you should also collect all other documents such as bank statements, receipts, and contracts that prove expenses for your business. These documents can serve as evidence in case the tax office wants to audit your input tax calculation.
When calculating the input tax, it is important to note that not all expenses are fully deductible. There are certain expenses where only a portion of the VAT can be claimed as input tax, such as with assets used for both business and personal purposes or with employee meals.
There are also specific regulations and considerations in the area of input tax that you should be aware of. For example, there is the rule of input tax adjustment, which states that you must make an adjustment to your input tax if the circumstances change that led to the original input tax deduction. This could be the case, for example, if you use the purchased goods or services differently than planned.
In summary, it is important to consider all relevant expenses, collect proper documentation, and adhere to the special regulations regarding input tax in order to optimize your tax burden and avoid any tax disadvantages. If you are unsure if you have considered all relevant expenses or have further questions regarding the calculation of input tax, I recommend consulting a tax advisor who can assist you in correctly calculating the input tax.
I hope that this information has been helpful to you and I am available to answer any further questions you may have. Thank you for your trust and I wish you success in your self-employment in online trading.
Best regards,
Quentin Reuter
