Revenue from multiple individual businesses
August 6, 2010 | 30,00 EUR | answered by Dipl.BW/SB Ulrich Stiller
My husband is a freelancer (architect) and liable for sales tax, I am self-employed (office services) and also liable for sales tax. We each have our own sales tax number with the tax office. (Sole proprietorships)
We own a vacation rental together and rent it out, with no personal use. Rental income is under 17,500 euros per year. (Small business regulation)
Now I read that according to sales tax law, the income of all businesses of a sole proprietor is taken into account for sales tax. However, the vacation rental belongs 50% to my husband and 50% to me. How is this to be interpreted in terms of sales tax? Does the small business regulation not apply in this case? We did not show any sales tax on the invoices in 2009. Please explain whether the small business regulation applies to the vacation rental in our case.
Thank you
Kind regards
Dear seeker of advice,
Thank you for your inquiry, which I would like to answer based on your information and in the context of your commitment in a preliminary consultation as follows:
In your case, there are 3 (three) companies in terms of turnover tax:
1. Husband's company
2. Wife's company
3. Company of the property community, which is a separate entrepreneur for turnover tax purposes according to § 2 UStG.
For the assessment of the small business status according to § 19 UStG of the property community, only their turnover should be considered. Since the rental of the holiday apartment is likely to be turnover that falls under the tax exemption of § 4 No. 12 UStG, these turnovers are always tax-free, even if the limits of 17,500 euros and 50,000 euros are exceeded, because tax-free turnovers according to § 4 No. 12 UStG are not to be included in the calculation of these limits.
If the tax office assumes hotel-like turnovers in the rental of the holiday apartment (hotel-like turnovers are subject to turnover tax), which I cannot assess without detailed knowledge, you also have nothing to fear, as the rental income is below 17,500 euros. Then the property community is a small business according to § 19 UStG.
I hope I could be of assistance and alleviate your concerns about this issue.
Best regards
Ulrich Stiller
Tax consultant/Diploma in Business Administration
