How do I calculate the amount to be paid for actual taxation?
June 24, 2024 | 40,00 EUR | answered by Felix Schönecker
Dear tax consultant,
my name is Tobias Klinger and I run a small business that calculates taxes using the cash accounting method. I am having difficulty in correctly calculating the amount to pay and I am hoping for your assistance.
The current situation is as follows: My business generates revenues at various levels and I am having difficulty in determining the exact amount of value-added tax to pay. I am concerned that I may be paying too much or too little, which could lead to issues with the tax office.
My concerns are that due to my lack of knowledge, I may make errors in the calculations and as a result, my business may suffer financial losses. Additionally, I want to ensure that I am complying with all legal requirements and not risking any fines.
Therefore, my question to you is: How do I correctly calculate the amount to be paid under the cash accounting method? Are there specific formulas or methods that can assist me? What steps do I need to follow to ensure that my calculations are accurate and error-free?
I appreciate your assistance in advance and look forward to your helpful tips and advice.
Best regards,
Tobias Klinger
Dear Mr. Klinger,
Thank you for your inquiry regarding the cash-based accounting method and the correct calculation of the amount of value-added tax to be paid. I understand your concerns and would like to assist you with my expertise.
With the cash-based accounting method, the value-added tax is only paid to the tax office when the invoice has actually been paid. This means that the value-added tax is only due when the customer's payment has been received.
To calculate the amount to be paid correctly, you must first calculate the value-added tax. To do this, multiply the net amount (excluding value-added tax) by the applicable value-added tax rate. In Germany, the regular value-added tax rate is currently 19%.
An example for clarification: If you generate a turnover of 1,000 euros, you calculate the value-added tax as follows: 1,000 euros x 0.19 = 190 euros. The amount of value-added tax to be paid is therefore 190 euros.
It is important that you document all invoices and incoming payments accurately to keep track of the value-added tax to be paid. You should regularly calculate your turnovers and the corresponding value-added tax to ensure that you do not make any errors and comply with all legal requirements.
It may be helpful to use accounting software or an Excel spreadsheet to clearly record your turnovers and value-added tax. This way, you can keep track of everything and identify and correct possible errors early on.
I also recommend that you stay informed about changes in tax law and consult a tax advisor if you are unsure. A professional tax advisor can assist you with the correct calculation of value-added tax and other tax-related questions.
I hope that this information is helpful to you and alleviates your concerns regarding the correct calculation of value-added tax. If you have any further questions, please do not hesitate to contact me.
Best regards,
Felix Schönecker
