Option (sales tax law)

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In sales tax law, an option is the treatment of tax-exempt sales as taxable. With the option of tax liability under certain conditions, an entrepreneur can acc. § 9 UStG the waiver of a tax exemption within the meaning of § 4 explain Sales Tax Act. For certain output sales , the sales tax law provides for a tax exemption - at the same time, the input tax deductions i. S. d. § 15 UStG excluded. The advantage of treating tax-free sales as taxable is that this enables input tax to be deducted for the opting entrepreneur.

General

Requirements for the option are:

  • The turnover that is opted for tax liability must be tax-free according to § 4 No. 8a to g, No. 9a, No. 12, 13 or 19 UStG (so-called dispensable sales),
  • the turnover must be made to another entrepreneur for his company.

It should be noted that the waiver can be limited to individual sales. If the entrepreneur provides several tax-free services, for which the prerequisites for the option are given, there is an option for each individual turnover. There is no obligation to apply the option for all sales of the same type.

Example:
As a rule, a doctor provides tax-free medical treatment in accordance with Section 4 No. 14 UStG. Since these sales by the doctor do not count among the sales that can be waived under Section 9 (1) UStG, the doctor cannot opt ​​for sales tax.

Exercising the option

The option is exercised in that the entrepreneur treats the tax-free turnover as taxable. This is done by the entrepreneur calculating the sales tax ( value added tax ) in the invoice and registering it with the tax office in his tax return and transferring it to the tax office. Additional prerequisites for the option of tax liability are in accordance with Section 9 (3) of the UStG must be observed when selling property. If the property is sold through a purchase agreement , the option can only be given in the § 311b BGB notarized purchase contract can be made. In the context of the foreclosure auction , the option of tax liability must be declared at the latest by the submission of the bid.

Limitation of the option

The option is acc. Section 9 (2) of the UStG is restricted, in particular for renting and leasing. The option is only possible here if the recipient of the service uses the property for sales that do not limit the input tax deduction (so-called deductible sales ). The prerequisite is therefore that the recipient of the service achieves sales which, according to Article 15 (1) and (3) UStG entitle you to deduct input tax. The restriction does not apply to buildings that were completed before the dates specified in Section 27 (2) UStG or for which construction was not started on time.

Example:
A landlord leaves business premises to an exporter (date of construction of the building after January 1, 1998). The rental services are included in the option-eligible revenues. The exporter provides tax-free export services according to § 4 No. 1a i. V. m. § 6 UStG. However, these tax-exempt sales entitle according to Section 15 (2) i. V. m. Section 15 (3) UStG for input tax deduction (so-called deductible sales). Consequently, the option towards the exporter is permissible. (In the case of an older building, the option would be possible anyway, regardless of a possible restriction of Section 9 (2) UStG.)