Is there a limit to the value-added tax that I, as an entrepreneur, have to pay?
July 28, 2022 | 45,00 EUR | answered by Quentin Reuter
Dear tax advisor,
My name is David Gerdes and I am the owner of a small business. In recent years, my revenue has been steadily growing and I have noticed that I have to pay more and more sales tax. Now I am wondering if there is a limit to the amount of sales tax that I, as a business owner, have to pay.
So far, I have not delved deeply into the topic of sales tax, as I have mainly focused on my day-to-day business. However, I now realize that sales tax makes up a significant portion of my income and I would like to know if there are ways to reduce the sales tax or if there is a threshold beyond which I do not have to pay sales tax anymore.
I am concerned that the increasing sales tax payments could affect my liquidity and would therefore like to learn more about how I can optimize my sales tax burden.
Could you please help me and tell me if there is a limit to the sales tax that I, as a business owner, have to pay? Are there ways to reduce or avoid sales tax? I would greatly appreciate your professional advice and possible solutions.
Thank you in advance.
Sincerely,
David Gerdes
Dear Mr. Gerdes,
Thank you for your inquiry regarding the value added tax in your company. As a tax advisor specializing in value added tax, I am happy to assist you in answering your questions and providing possible solutions.
First and foremost, I would like to point out that there is no fixed cap on the value added tax that an entrepreneur must pay. The value added tax typically depends on the revenue generated by your company. The higher the revenue, the more value added tax is due. However, there are certain revenue thresholds at which you become liable for value added tax as an entrepreneur. These thresholds vary depending on the country and may change over time. Therefore, it is important to keep an eye on these thresholds and seek advice if you are unsure whether you are liable for value added tax.
There are various ways we can explore together to reduce or optimize the value added tax burden. One option is to utilize input tax deduction, where you can deduct the value added tax paid on input invoices from the value added tax on your output invoices. This effectively reduces your value added tax burden. There are also other tax planning opportunities that allow you to optimize the value added tax. It is important to implement tax measures properly to avoid potential tax risks.
I am available for individual consultation to work together on finding the best solution for your company. Please do not hesitate to contact me to schedule a consultation.
I hope that this information has been helpful to you, and I look forward to assisting you in optimizing your value added tax burden.
Best regards,
Quentin Reuter
Tax Advisor
