Ask a tax advisor on the topic of Sales tax / Turnover tax

value-added tax

February 22, 2010 | 20,00 EUR | answered by Michael Herrmann

I have a psychotherapeutic private practice. Several psychotherapists work for me on a fee basis. They all bill insurance companies independently under their own name. I receive 40% of the billing amount. This 40% covers rent, office expenses, and practice management (which I do, including assigning patients to the respective therapist's specialty, etc.).

Question: Are the 40% subject to sales tax?

My tax advisor wants me to establish a partnership, is this necessary to avoid sales tax?

Best regards

Michael Herrmann

Dear inquirer,

first of all, thank you for your inquiry, which I would be happy to answer based on the information provided and in the context of your initial consultation. The response is based on the description of the situation. Missing or incorrect information about the actual circumstances can affect the legal outcome.

Even though your other services can be invoiced without sales tax, the fees described by the fee-based therapists are subject to sales tax. The tax exemption for psychotherapeutic services does not apply here.

Therefore, your tax advisor's proposal to establish a partnership is correct. In this case, your share of the profits could be regulated through profit distribution, which would not result in any sales tax problems.

I hope that these details have given you a first overview of the situation and remain

Sincerely,

Michael Herrmann
Dipl.-Finanzwirt (FH)
Tax advisor