Difference between profit and proceeds

A brief explanation of the difference

The difference between profit and revenue can be immense. The range can be wide, especially when setting up a business or renovating.

• The proceeds or Sales is usually higher than profit. That is the main difference.
• Because the profit or Profit is calculated from the proceeds minus your business costs. Depending on the industry, this can be costs for operating rooms, travel expenses or shop fittings.
• If the profit is high, the entrepreneur is happy and with him the tax office and health insurance. Because tax levies and insurance premiums to be paid depend on the amount of profit. This makes it all the more important to provide correct information to the tax office, health insurance company or authorities.

Profit and revenue - that's how you state it correctly

Sales tax, income tax, insurance contributions - everything should be right from the start, if possible, in order to avoid back payments.

• If you do not take advantage of the small business regulation, you must first state your turnover in your tax return. Because even the pure proceeds or You have to pay tax on sales at the tax office. You can deduct sales tax, which you have paid as part of your business expenses, from this amount.
• Health insurance and offices - for example, when applying for a start-up grant, parental allowance or pension - are interested in pure profit. This must also Small business owner Calculate in order to be able to tax your income and pay cash contributions correctly.
• With the annual income tax return, every entrepreneur must file a profit / surplus statement (Appendix EÜR). The difference quickly becomes clear here, because you can deduct all operating costs from the proceeds. However, you should be able to prove these costs by means of a receipt or bank statement.