What are the consequences of incorrect calculation of value added tax?
November 7, 2023 | 40,00 EUR | answered by Friedhelm Sauer
Dear tax advisor,
My name is Sven König and I run a small trading company. Lately, I have noticed discrepancies in the calculation of value-added tax. I am concerned about the possible consequences if I have incorrectly calculated the VAT.
The current situation is as follows: I have issued some invoices where I am not sure if the VAT was calculated correctly. I have read that incorrect calculation of VAT can lead to high fines. This worries me greatly, as I have not intentionally made mistakes, but rather am unsure about the correct procedure.
I would like to know specifically what consequences I may face if the VAT was incorrectly calculated. Are there ways to correct these errors and how can I prevent similar mistakes in the future?
Thank you in advance for your support and advice.
Best regards,
Sven König
Dear Mr. King,
Thank you for your inquiry regarding the calculation of value added tax in your trading company. It is understandable that you may be concerned if you are unsure whether the VAT has been calculated correctly. It is important to adhere to the legal regulations when dealing with VAT, as incorrect calculation can indeed result in high fines.
In case of incorrect calculation of VAT, various consequences may occur. Firstly, the tax office may demand a repayment of the underpaid VAT. This repayment may be subject to high interest rates and potentially penalty surcharges. Additionally, there may be a tax repayment that could financially burden your company. In severe cases, a fine may even be imposed.
To avoid such consequences, it is important to correct any errors in the calculation of VAT as soon as possible. You should review and, if necessary, correct the incorrect invoices. If you are unsure about how to correctly calculate VAT, I recommend seeking professional help from a tax advisor like myself. A tax advisor can assist you in identifying, correcting, and avoiding errors in the future.
To avoid errors in the calculation of VAT, it is important to familiarize yourself with the legal regulations. Ensure that you apply the correct tax rates, correctly indicate the VAT, and correctly claim input tax. Additionally, maintain your bookkeeping carefully and properly.
I hope that this information has been helpful to you. If you have any further questions, please feel free to contact me.
Best regards,
Friedhelm Sauer, Tax Advisor
