Input tax flat rate
Companies must i. d. R. acc. 13 Sales Tax Act (UStG) collect sales tax on domestic services and pay it to the tax office and receive it according to § 15 UStG reimburses the sales tax paid by you on the services of other entrepreneurs (so-called input tax). Certain groups can determine their input tax credit as a flat rate, the input tax flat rate : Instead of adding up the input tax from the turnover tax payments actually made, these entrepreneurs can calculate it as a percentage of their own turnover according to so-called “general average rates” without proof.
One speaks of an average taxation and, in the area of agriculture and forestry, of the flat rate .
Sectors and professions that can claim flat-rate input tax
Entrepreneurs of certain professions and trades can acc. 23 UStG i. V. m. Section 69 and Section 70 of the Sales Tax Implementation Ordinance determine your input tax in full or in part at a flat rate. Which professional and commercial branches these are and which average rates apply for the flat-rate calculation of input tax are specified in an annex to paragraphs 69 and 70 UStDV. The regulation applies, among other things, to handicraft businesses in many trades, retailers in many industries, hospitality companies and members of the liberal professions such as artists, journalists and writers.
If the company is subject to accounting obligations or has sales of more than € 61,356 per calendar year, it cannot make use of the flat-rate regulation.
Average taxation primarily simplifies bookkeeping, but can have financial advantages or disadvantages (if the calculated average rate is significantly higher or lower than sales tax was actually paid). Entrepreneurs can also waive the application of the input tax flat rate and determine the amount according to general regulations. However, they are then bound by this decision for at least 5 years.
Non-profit, charitable and church bodies
According to § 23a UStG, the input tax amount is 7% of sales. If the corporation is subject to accounting obligations or has sales of more than € 35,000 per calendar year, it cannot make use of this regulation. It can also waive the application of this regulation for a period of at least 5 years and determine the amount according to general regulations.
Farmers and foresters
According to § 24 UStG, the sales tax liability and input tax credit of farmers and foresters are calculated on a flat rate basis. The prerequisite for the flat rate is that the farmer or forester has not waived taxation based on average rates.
According to Section 24 (1) UStG, a special sales tax rate, the so-called average rate, must then be applied to the sales generated with self-produced products by agricultural or forestry companies since 2007 (instead of the 7% or 19% sales tax due according to the general rates) the following amount can be added:
1. for supplies of forestry products (with the exception of sawmill products) 5.5%,
2. for sawmill products, beverages, alcoholic liquids and other services 19% (excluding services taxed at a reduced rate in accordance with Annex 2 of the UStG),
3. for other agricultural sales 10.7%.
The input tax amounts, insofar as they are attributable to the sales referred to in No. 1, are set at 5.5%, in other cases at 10.7% of the assessment basis for these sales. In the cases of No. 1 and 3, the payment debt to the tax office is zero. The average taxation in agriculture and forestry may also be applied by farmers who are required to keep accounts, regardless of the size of the farm.
Export services (sales according to § 4 Paragraph 1 to 7 UStG) are tax-free, but the input tax amounts are determined unchanged.
Pursuant to Section 24 (4) UStG, farmers and foresters have the option of waiving taxation based on average rates for at least 5 years up to the 10th calendar day of the following calendar year. Arise z. B. relatively high input tax credits due to larger construction projects, taxation according to general regulations is more favorable for the entrepreneur.
The flat rate is seen as an instrument of state subsidization : It means that farmers are allowed to levy higher sales tax for typical agricultural sales, but do not have to pay it, while their customers receive these amounts from the state as input tax. In March 2019, the Federal Court of Auditors found that the application of the flat rate yields German farmers around 200 million euros annually, which their customers can claim to a large extent as input tax - which ultimately escapes the state as tax revenue. The EU Commission sees the application of the flat rate to all German farms regardless of their size as a violation of EU law and has initiated infringement proceedings against Germany in this context.
Individual evidence
- ↑ see: http://www.steuertipps.de/lexikon/l/land-und-forstwirtschaft- Averagesbesteuer
- ↑ Beware of Sales Tax - Basics You Should Know. DLG Merkblatt 429. www.dlg.org, accessed on October 8, 2019 .
- ↑ Subsidies for agriculture are no longer appropriate. www.finanzblatt.net, February 9, 2016, accessed October 8, 2019 .
- ↑ How farmers milk the tax office. taz.de, August 14, 2019, accessed October 8, 2019 .
- ↑ 2019 report - Average rate taxation according to § 24 of the Value Added Tax Act. www.bundesrechnungshof.de, April 17, 2019, accessed on October 8, 2019 .
- ↑ Average taxation for farmers may be against EU law. www.haufe.de, March 13, 2018, accessed October 8, 2019 .
- ↑ VAT flat rate: Brussels is suing Germany. www.gabot.de, August 14, 2098, accessed October 8, 2019 .
