Sistema tributario

In principle all goods, deliveries and services are liable to turnover tax (exceptions: see § 4 UstG (Turnover Tax Act)). Currently the turnover tax amounts to 19 % of the invoice amount. A reduced rate of taxation of currently 7 % applies to nearly all articles of food as well as for books, brochures, art objects and some other goods. For deliveries and services to the consumer the tax has to be included in the invoice amount. If the invoice amounts to more than 150 Euros the recipient can ask to have the tax identified. As a person carrying on a trade or business you can deduct value-added tax charged to you by other companies as so-called input tax of your own turnover tax debt. An example: In June Martin Müller achieved a turnover of 4.760 Euros (gross) with his retail business. He invoiced his customers 19 % value-added tax amounting to 760 Euros. His suppliers identified in their invoices value-added tax amounting to 290 Euros. Therefore he has to pay to the tax office: 760 Euros minus 290 Euros = 470 Euros. A turnover-tax advance return has to be submitted to the tax office before the 10th day of the following calendar month electronically (example see page 28/29). Only in exceptional cases can it still be submitted on paper. For businesses whose turnover tax liability amounted to less than 6,136 Euros in the previous year a tax advance return before the 10th day of the new quarter is sufficient. You have to calculate your turnover tax (advance payment) for the corresponding fiscal period yourself and remit it to the tax office. The payment period for remittances is three days – decisive is the date of receipt at the tax office. In the year following the foundation and in the calendar year thereafter persons setting up in businesshave to submit their advance value-added tax return on a monthly basis. This has the advantage that input VAT amounts – possibly after deposit of a security - might be disbursed faster.
For the calculation of the turnover tax, the following has to be recorded:

• All remunerations received for products and other services – separated according to the rate of taxation as well as according to taxable and tax-free turnover.
• All payments for deliveries received and other services as well as the input tax included therein.

Only so-called small traders can choose at the start of their activity whether they charge VAT or not. The limit is a turnover below 17,500 Euros in the previous year and below 50,000 Euros in the current year. In the tax assessment a small trader is treated like an individual. As he is not paying turnover tax he cannot charge value-added tax in his invoices and value-added tax he had to pay himself (i.e. to a seller for goods received) cannot be refunded as input tax by the tax office.