For the so-called small entrepreneur, there are significant simplifications in Germany with regard to VAT. Thanks to the small trader regulation, the German tax office does not collect sales-dependent sales tax from the trader, and he therefore does not have to file an initial VAT return.
Annual VAT return for small business – German tax office
However, the small businessman is only required to submit an annual VAT return to the German tax authority.
What are the implications of small business regulation?
A small businessman cannot show sales tax on his invoices, nor is he entitled to deduct input VAT. However, if he wants to waive the regulations for small businessmen and still file preliminary VAT declarations and do his sales tax settlements in Germany, he can file a corresponding application with the German tax authority. This decision, however, is binding for five years and the entrepreneur cannot withdraw from it.
Requirement: owning a small business in Nimeczech
A small businessman is an entrepreneur whose total turnover including VAT did not exceed €22,000 in the previous calendar year and will not exceed €50,000 in the current year. Expected turnover for the current year is based on presumed sales growth. It is assumed that in the year of opening a business, a small entrepreneur will not exceed the limit of 22,000 euros.
Required documents: nhe separate application is required
The regulation of the small entrepreneur applies by law. A separate application is not required. However, when setting up a business in Germany, the questionnaire for tax registration must provide information on the amount of expected turnover.
Legal basis: § 19 Value Added Tax Act (German: Umsatzsteuergesetz)
