The Value Added Tax is a tax on certain transactions. These include in particular supplies and other services that an entrepreneur provides domestically for consideration as part of their business. The Umsatzsteuergesetz also covers certain intra-Community acquisitions and imports.
What is VAT?
The VAT is levied on legally defined transactions. For a taxable transaction, the tax is generally calculated on the basis of the consideration and the applicable tax rate.
As a general rule, businesses pay the VAT due to the tax authorities. In economic terms, the VAT is regularly passed on to the recipient of the service via the price in the case of ordinary taxable sales.
What is the difference between taxable (steuerbar) and liable to tax (steuerpflichtig)?
Revenue is controllable, if it fundamentally falls under an offence of the Umsatzsteuer law.
However, a taxable supply is not automatically subject to tax. The Umsatzsteuer Act provides tax exemptions for certain supplies.
In short: ‘Taxable’ means that a supply is, in principle, subject to the Umsatzsteuer Act. It is only subject to tax if no tax exemption applies.
What Umsatzsteuers are available?
The general Umsatzsteuer rate is currently 19 per cent. A reduced tax rate applies to statutory defined turnover. 7 per cent.
Which tax rate applies depends on the nature of the respective transaction and the statutory regulations.
What is the difference between VAT and Input VAT?
VAT arises on taxable outward supplies. As Input VAT By contrast, VAT refers to the tax charged to a business for certain input supplies.
Under the statutory conditions, a business owner can deduct this Input VAT from the VAT they owe.
Who owes the VAT?
For standard taxable supplies and other services, the supplier is generally the person liable for the tax.
There are legal exceptions to this. At Reverse charge procedure for example, the recipient of the service can owe the VAT.
What is the advance VAT return?
The VAT is declared towards the Tax office within the scope of the taxation procedure. For many business owners, this is done during the year via the VAT Return.
The advance VAT return must therefore be distinguished from the term VAT itself: VAT refers to the tax, whereas the preliminary return refers to the procedure for periodically declaring certain VAT amounts.
