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Value added tax on goods in the case of exemption from sales tax due to blindness UStG Paragraph 4 Paragraph 1

April 17, 2018 | 40,00 EUR | answered by Dipl.-Kfm. Frank-Olaf Illiges

I have a business and, due to my blindness, I am exempt from sales tax according to §4 paragraph 19 of the Sales Tax Law. Now, how would it be if I expand my business into retail sales for both business and end customers?

Here is a fictional example:

I purchase a printer from a supplier and pay €119 (€100 + €19 sales tax). I add €1 to the price.

What happens now, how would the invoice to a customer look like?

- On the invoice for the printer, I do not show any sales tax and the price is €120. For a business customer, the input tax deductibility for the product is lost.

Or:

- I only show my personal service as sales tax exempt, but the printer with the usual 19% sales tax, so €101 + 19% = €120.19 to be paid.

Or:

- It may be the case that I might get the input tax refunded by the tax office when purchasing the product and I sell the printer without any additional sales tax?
So, I pay €119 when purchasing, get €19 refunded by the tax office, and sell the printer sales tax exempt for €101 on the invoice.

Dipl.-Kfm. Frank-Olaf Illiges

Dear inquirer,

Thank you for your inquiry, which I will gladly answer taking into account your input and the rules of this platform.

Please note that my explanation is based on the facts presented, and that adding, omitting, changing information, or the ambiguity of information can change the tax result. Please be aware that this cannot replace individual comprehensive advice.

As part of your business, you carry out deliveries or other services that are exempt from VAT according to § 4 No. 19a UStG. Therefore, you cannot claim the VAT charged by your suppliers (e.g. the 19.00 EUR for the printer purchased) as input tax (§ 15 para. 1 no. 1 UStG). This VAT is therefore an operating expense for you (§ 9b para. 1 EStG). The cost of goods sold for the purchased printer is therefore 119.00 EUR. You sold the printer to your customer. In the invoices to your customer, you do not show any VAT. The invoice amount is 120.00 EUR.

Best regards,
Dipl.-Kfm. Frank-Olaf Illiges
Tax consultant