Tax prepayment

An advance tax payment is an advance payment on the expected annual tax liability. In order to ensure a regular flow of money into the state budget and to save the taxpayer a possibly high back payment , advance payments are already made in the current year .

Notification and assessment

The advance payments are determined by advance payment notification, which is always subject to review and can therefore be changed at any time ( Section 164 AO ). The amount of the required advance payment is generally based on an estimate based on the most recent investment result .

The assessment taxes income , corporation , trade and sales tax arise at the end of the calendar year . Only then one is for the annual tax determination and collection to the enforcement possible. Advance payments, on the other hand, have to be made on fixed dates during the assessment period . Like any other tax assessment , the advance payment assessment is also enforceable.

If the advance payments exceed the annual tax, the difference will be reimbursed to the taxpayer. If the annual tax is higher than the advance payments, the difference must be paid within one month of the notification of the tax assessment . In the case of sales tax, the tax return submitted is equivalent to a tax assessment, subject to review ( Section 168 AO), so that the remaining tax liability must be paid within one month of submitting the sales tax return ( self- assessment ). The payment of a surplus to the taxpayer requires the approval of the tax office.

Income tax prepayment

Income tax prepayments ( Section 37 EStG ) are only set if they amount to at least € 400 per calendar year and at least € 100 for an advance payment date. Income tax prepayments are due on March 10, June 10, September 10 and December 10.

The amount of the advance payment is basically based on the annual tax that resulted after the deduction of the tax deductions ( wage tax , capital gains tax , up to and including 2008 also interest withholding tax ) in the last assessment. In the assessment, however, some expenses and deductions are not taken into account, in particular these are:

certain special editions , etc. a. Maintenance payments , church tax paid , tax consultant costs and training costs , the increased pension amounts , the donations according to § 10b EStG, the extraordinary burdens according to § 33 EStG and the childcare costs if these expenses and deductible amounts do not exceed € 600,

negative income from renting and leasing buildings that had not yet been built or purchased at the beginning of the year for which the advance payments are set; this does not apply, however, if increased deductions according to the Berlin Promotion Act or special depreciation according to the Promotion Area Act are claimed.

Advance payments can be changed if the income situation has changed or is likely to change in the calendar years for which the advance payments were set. If the income falls, the taxpayer, who has to prove this or substantiate it, can apply for a reduction. If the income increases, for which the tax office bears the burden of determination , the tax office can ex officio increase the advance payments. The taxpayer is not obliged to report any circumstances that increase the annual tax. However, the tax office is authorized to request information on the relevant circumstances from the taxpayer.

The expected annual tax is decisive for the determination of the advance payments when the tax liability arises for the first time.

In addition, it is possible to set a subsequent advance payment as an adjustment to increased income levels up to the end of the 15th calendar month following the assessment period. In the case of subsequent advance payments, the increase amount must be at least € 5,000. Payment is due one month after notification of the advance payment notification.

Special forms of advance payment are withholding taxes , where a third party ( employer or bank ) withholds the tax and pays it for the taxpayer:

Income tax : it is paid as a deduction from wages.
Investment income tax : it is levied as a deduction from investment income as soon as it is incurred and no exemption order has been issued or an existing one has been exceeded. However, capital gains tax is only offset against the income tax to be determined if the income from capital assets has been assessed, which is not always the case due to the withholding effect of capital gains tax ( Section 43 (5) EStG).

Corporate tax prepayment

The same principles apply to the determination and collection of advance payments on corporation tax as "income tax for corporations " as for the determination of advance income tax payments .

Commercial tax prepayment

The advance payment dates for trade tax are February 15, May 15, August 15 and November 15 ( Section 19 GewStG ). The municipality sets the advance payments by means of an advance payment notice. Each advance payment amounts to a quarter of the tax that resulted from the last assessment (tax law) .

Due to the peculiarity of trade tax law , according to which the business premises tax office sets the trade tax base and then the municipality sets trade tax, a change in the trade tax prepayments requires a change in the trade tax base by the tax office. For the purpose of adjusting the advance payments upwards or downwards, the tax office can set a tax base amount. The municipality is bound by this measurement decision as a basic decision and adjusts the advance payments.

A subsequent adjustment can be made up to the end of the 15th calendar month following the survey period.

VAT prepayment

While in the case of income, corporation and trade tax the advance payments are always determined by the tax authorities by decision, in the case of sales tax, the entrepreneur is obliged to calculate the tax himself (self- assessment ), to declare it in a sales tax advance notification and at the same time to the financial administration to be paid ( § 18 UStG ).