Are there any special regulations for small business owners regarding trade tax?
March 31, 2023 | 40,00 EUR | answered by Isabel Möller
Dear tax consultant,
I have been running a small business for some time now and I am unsure if there are any specific regulations for small business owners regarding trade tax. My name is Adele Schönecker and I operate a small craft business with an annual turnover of less than 50,000 euros. So far, I have not delved deeply into the topic of trade tax, as I assumed that as a small business owner, I may not have to pay trade tax or pay less of it.
My concerns lie in the fact that I do not know how to correctly calculate and pay my trade tax. I do not want to make any mistakes and potentially face high repayments or penalties. Therefore, it would be very helpful for me to learn more about the specific regulations for small business owners regarding trade tax.
Could you please explain to me if there are any special regulations or allowances for small business owners when it comes to trade tax? How can I ensure that I calculate and pay my trade tax correctly to avoid any potential issues? Are there any ways to reduce the trade tax burden as a small business owner?
I am looking forward to your help and thank you in advance for your support.
Kind regards,
Adele Schönecker
Dear Mrs. Schönecker,
Thank you for your question regarding trade tax as a small business owner. It is understandable that you may feel uncertain and want to avoid potential problems. I am happy to explain the special regulations and allowances that apply to small business owners when it comes to trade tax.
In general, small business owners are subject to trade tax. However, there are allowances in place to alleviate the burden on small businesses. The allowance is usually €24,500 and is deducted from the taxable income. This means that no trade tax is due up to this amount. Additionally, if the taxable income is up to €30,000, the trade tax can be set to zero upon request.
It is important to note that the €24,500 allowance is granted only once per year, regardless of how many businesses an entrepreneur operates. If you have multiple businesses, you would need to divide the allowance accordingly.
To calculate your trade tax correctly, you need to determine your taxable income. This includes your profit from the business operations minus certain additions and deductions. Once you know your taxable income, you can apply the allowance and calculate the trade tax. It is recommended to consult a tax advisor to ensure the calculation is done accurately.
There are various ways to reduce the trade tax burden as a small business owner. For example, you could make investments that lead to depreciation and therefore decrease the profit. Creating provisions can also lower the trade tax burden. A tax advisor can provide personalized advice and show you other options.
I hope this information helps you understand the special regulations for small business owners regarding trade tax. If you have any further questions or need assistance, please feel free to contact me.
Sincerely,
Isabel Möller
