How is the value added tax billed for electronic services?
December 17, 2022 | 50,00 EUR | answered by Lina Sauer
Dear Value Added Tax Expert,
My name is Roberta Meyer and I run an online shop where I offer various electronic services. However, I have never calculated VAT before and I am unsure of how to do this correctly.
Currently, my turnover is still below the small business regulation, but I would like to learn more about VAT calculation for electronic services, as I may exceed the threshold in the future.
My concerns are that I do not know exactly which services are subject to VAT, what the tax rate is, and how to correctly remit VAT to the tax office. Additionally, I am unsure if there are other tax aspects I need to consider in addition to VAT.
Could you please explain to me how VAT is calculated for electronic services? Which services are affected and what is the current tax rate? Are there any special considerations to keep in mind and what specific steps do I need to take to correctly calculate VAT?
Thank you in advance for your help and support.
Sincerely,
Roberta Meyer
Dear Mrs. Meyer,
Thank you for your inquiry regarding value added tax on electronic services. As an expert in VAT, I can help you navigate this area.
In general, all electronic services are subject to VAT, regardless of whether you are selling physical goods or offering digital content. Electronic services include the provision of software, apps, music downloads, e-books, online courses, webinars, cloud services, and more.
The current VAT rate for electronic services in Germany is 19%. This tax rate must be added to the net amount of your sales. So, for example, if you sell an online course for 100€, you must also charge an additional 19€ in VAT.
If you opt for the small business regulation, you are exempt from VAT as long as your annual turnover is below 22,000€. Once you exceed this threshold, you must declare and pay VAT to the tax office.
To correctly invoice VAT, you must regularly submit VAT returns to the tax office. In these returns, you report your sales and the VAT paid. Additionally, you must issue your invoices properly and show the VAT separately.
It is important to also consider other tax aspects, such as income tax returns, trade tax, or accounting. It is advisable to consult a tax advisor to ensure that you fulfill all tax obligations correctly.
I hope this information helps you and I am available for any further questions.
Best regards,
Lina Sauer
