How do I calculate the sales tax for my services?
January 23, 2024 | 40,00 EUR | answered by Felix Schönecker
Dear tax advisor,
My name is Irmgard Mühlberg and I am a self-employed service provider in the field of event planning. I am facing the challenge of correctly calculating and paying the sales tax for my services. So far, I have not delved deeply into the topic and am therefore unsure of how to proceed.
Currently, I offer various services in the context of event planning, such as organizing weddings, birthday parties, and corporate events. My customers pay different amounts for my services, depending on the scope and type of event. However, I have never invoiced sales tax before and do not know how to correctly calculate and indicate it.
My concern is that I may make mistakes in calculating the sales tax and consequently have problems with the tax office. Therefore, I would like to learn from you how to correctly calculate the sales tax for my services and how to correctly indicate it on my invoices. Are there specific regulations or peculiarities that I need to consider when calculating sales tax?
I am looking forward to your support and thank you in advance for your help.
With kind regards,
Irmgard Mühlberg
Dear Mrs. Mühlberg,
Thank you for your inquiry regarding the sales tax for your services in the field of event planning. It is understandable that you may feel uncertain when it comes to the correct calculation and remittance of sales tax, especially if you have not yet delved into it extensively. I am happy to assist you and explain how you should proceed.
As a service provider in the field of event planning, you are generally required to charge sales tax on your services and remit it to the tax authorities. The sales tax rate in Germany is currently 19% (standard rate) and is added to the net amount of your services. This means that you need to increase the amount that your customers pay for your services by 19% in order to obtain the total amount including sales tax.
So, for example, if you offer wedding planning for 1,000 euros, you would have to invoice your customer 190 euros in sales tax, resulting in a total amount of 1,190 euros. On your invoice, you should specify both the net amount (1,000 euros) and the sales tax amount (190 euros). Additionally, you must clearly indicate that it is sales tax so that your customers can understand how the total amount is composed.
However, there are also some special rules and exceptions in the field of sales tax that you should be aware of. For example, there are certain services that are exempt from sales tax, such as medical services or educational services. It is important that you familiarize yourself with these exceptions and ensure that you calculate the sales tax correctly.
If you are unsure or have further questions, I recommend seeking advice from a tax advisor who can provide you with personalized guidance. I am also available to continue assisting you and support you in correctly calculating and specifying the sales tax for your services.
I hope that this information has been helpful to you and I am available to answer any further questions you may have.
Sincerely,
Felix Schönecker
