What recording obligations do I have in connection with value added tax?
May 4, 2024 | 40,00 EUR | answered by Dietrich Hohenadel
Dear tax advisor,
I have a small business in the service industry and am therefore confronted with the issue of value added tax. I am unsure about the specific record-keeping obligations I need to comply with in relation to value added tax. So far, I have only kept track of my income and expenses in an Excel spreadsheet, but I am not sure if that is sufficient.
I am concerned that I may be violating legal regulations and could potentially face high fines or penalties. Therefore, it would be helpful to know what specific records I need to keep in order to meet the requirements of the tax office.
Could you please explain in detail what record-keeping obligations exist in relation to value added tax and how I can best implement them? Are there any specific software or tools that can assist me with this? I am grateful for any support to ensure that I fulfill my tax duties correctly.
Thank you in advance for your help.
Sincerely,
Heike Albrecht
Dear Mrs. Albrecht,
Thank you for your inquiry regarding the recording obligations in relation to value-added tax for your small business in the service industry. It is understandable that you are unsure about the exact records you need to keep in order to comply with legal requirements and avoid potential penalties or additional payments.
In general, entrepreneurs are required to properly record all business transactions that are relevant for taxation. This includes all income and expenses related to value-added tax. Your current Excel spreadsheet for income and expenses tracking is a good starting point, but I recommend that you further expand and structure it to meet the requirements of the tax office.
Specifically, you should keep the following records:
- Incoming and outgoing invoices: Record all invoices you receive and issue, including invoice number, date, description of services, net amount, value-added tax amount, and gross amount.
- Value-added tax returns: Document your value-added tax returns to ensure that you pay your value-added tax correctly.
- Cash book: Maintain a cash book where you record all cash receipts and payments.
- Receipts: Keep all receipts that document your business transactions, such as receipts, invoices, contracts, etc.
- Account reconciliations: Regularly compare your bookkeeping with your accounts and verify that all transactions have been correctly recorded.
To assist you with fulfilling these recording obligations, I recommend using accounting software or specialized accounting tools. These can help you efficiently record, manage, and analyze your business transactions. There are various programs on the market specifically designed for small businesses that can facilitate your bookkeeping.
In conclusion, I want to emphasize the importance of taking the recording obligations related to value-added tax seriously and fulfilling them properly. If you have any further questions or need assistance, I am happy to help.
Best regards,
Dietrich Hohenadel, Tax Advisor
