Is there a revenue limit at which I have to pay value-added tax?
October 14, 2022 | 30,00 EUR | answered by Friedhelm Sauer
Dear tax consultant,
I have been running an online shop for some time now, selling various products. So far, my revenue has been quite manageable, but recently I have seen a significant increase. Now I am wondering if I will have to pay value-added tax in the future.
My current revenue has been below the threshold of 22,000 euros per year, above which I would have to pay value-added tax. However, I feel that this year I may exceed this threshold. I am unsure if I would then have to calculate and pay value-added tax to the tax office.
I am concerned that if I exceed the revenue threshold, I may have problems with the tax office and have to pay back the value-added tax. I would like to know at what point and at what revenue threshold I would have to pay value-added tax, and what steps I would need to take in this case.
Could you please help me and explain at what revenue threshold I would have to pay value-added tax and what I would need to do if I exceed this threshold?
Thank you in advance for your assistance.
Kind regards,
Franceska Busch
Dear Mrs. Busch,
Thank you for your question regarding the value-added tax obligation for your online shop. It is understandable that you are concerned about whether you will have to pay VAT in the future, especially since your sales have increased significantly recently.
In Germany, it is generally required that as a business owner, you must pay VAT once you reach a certain sales threshold. Currently, the threshold for VAT payment is 22,000 euros per year. This means that as long as your sales are below this threshold, you are exempt from VAT payment.
However, if you exceed the sales threshold of 22,000 euros in a business year, you are obligated to pay VAT from the moment of exceeding the threshold. This means that from that point on, you must calculate VAT on your sold products and remit it to the tax office.
It is important to regularly review your sales to determine in a timely manner whether you have exceeded the sales threshold. If this is the case, you must contact the tax office and register as a VAT-liable business owner. You will then receive a VAT identification number and can show VAT on your invoices.
It is advisable to consult with a tax advisor early on to learn about your tax obligations and ensure that you comply with all legal requirements. Your tax advisor can also help you correctly remit VAT and avoid any potential issues with the tax office.
I hope this information helps you and answers your question regarding VAT obligations. If you have any further questions, please feel free to contact me.
Sincerely,
Friedhelm Sauer
Tax Advisor
