Can I pay the value added tax quarterly instead of monthly?
October 12, 2022 | 40,00 EUR | answered by Dietrich Hohenadel
Dear tax advisor,
My name is Ella Seebauer and I run a small online trading company. So far, I have been paying the sales tax monthly to the tax office, but due to the current economic situation, I am considering whether it is possible to pay the sales tax quarterly.
My current situation is as follows: Due to a significant decrease in sales over the past few months, I am having difficulty meeting the monthly sales tax prepayments. The liquidity of my company is under strain, and I am worried that I may no longer be able to handle the monthly payments. Therefore, I am looking for ways to reduce the sales tax payments and possibly switch to a quarterly payment schedule.
Therefore, my question is: Is it possible to pay the sales tax quarterly instead of monthly? Are there specific requirements that need to be met for this? What steps do I need to take to make the switch? And what would be the impact of a quarterly payment of sales tax on my company?
I thank you in advance for your support and advice on this matter. Your assistance would be of great importance to me in improving my financial situation and successfully continuing to run my company.
Sincerely,
Ella Seebauer
Dear Mrs. Seebauer,
Thank you for your inquiry regarding a possible switch from monthly to quarterly VAT payments. Indeed, there is the option to pay VAT quarterly, but certain conditions must be met.
Generally, VAT returns must be filed monthly and VAT must be paid to the tax office on a monthly basis. However, if the monthly VAT prepayments have become a financial burden for your company, you can apply for a permanent extension at the tax office. This means that you can pay VAT quarterly instead of monthly.
To obtain the permanent extension, you must demonstrate to the tax office that it is economically unreasonable for your company to pay VAT monthly. You must provide proof of your company's financial situation and, if necessary, submit a liquidity plan.
Once the tax office approves your application for a permanent extension, you must submit the quarterly VAT returns on time and pay the VAT quarterly. It is important to meet the deadlines for submitting the VAT returns to avoid late payment penalties or other fines.
Switching to quarterly VAT payments can financially relieve your company and give you more flexibility in liquidity planning. However, you should also consider that you may have to make a final payment at the end of the year if the quarterly prepayments were not sufficient.
I hope this information is helpful to you. If you have any further questions or need assistance, please feel free to contact me.
Sincerely,
Dietrich Hohenadel
