Subject to sales tax?
October 24, 2010 | 30,00 EUR | answered by Dipl.BW/SB Ulrich Stiller
I work as a doctor as a freelancer for a certification institute. I visit hospitals, conduct a quality audit, and create an audit report. The cumulative fee for this was approximately €8,500 in 2009, but this year, due to more assignments, it is around €20,500. This is not a medical activity exempt from VAT!
Question: Am I automatically liable for VAT this year? Or does the tax office have discretion? (Next year, I could manage my income better.)
Travel expenses are reimbursed as pass-through items, do I have to include them in my turnover (then my turnover for 2010 would be around €30,000!)
Are the expenses incurred (work tools, further education, meal allowances) deducted only from the fee or from the total turnover (fee + pass-through items)?
Best regards
Dear inquirer,
Thank you for your inquiry, which I would like to answer based on your information and in the context of your situation in a preliminary consultation as follows:
In your case, the small business regulation of § 19 UStG applies. According to this, no sales tax is due if the total turnover in the previous year did not exceed 17,500 EUR and in the current year 50,000 EUR, and you have not voluntarily opted for standard taxation. Sales from tax-exempt activities as a doctor are not included in the total turnover (§ 19 Abs.3 Ziff. 1 UStG).
In your case, the total turnover for the year 2009 is EUR 8,500, below the threshold of 17,500 EUR. The second requirement, total turnover in the following year (2010) below 50,000 EUR, is also met.
Therefore, the conditions for small business status are also met in 2010, meaning that you are NOT liable for sales tax in 2010.
However, from the year 2011, you will be subject to sales tax regarding your professional activity, as the turnover of the previous year (2010) exceeded 17,500 EUR.
If you do not exceed the turnover limit of 17,500 EUR in 2011, then you will be a small business again in 2012.
I hope my explanation has been helpful to you.
Best regards,
Ulrich Stiller
Tax advisor/Dipl. Business economist
