Apply for business for small business owners

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Even as a small business owner, you are an entrepreneur and therefore do business. You must apply for a trade at your local trade inspectorate. In order to keep your bureaucratic effort to a minimum, you should check whether you can take advantage of the small business regulation for tax purposes.

Anyone who earns money independently acts commercially.
Anyone who earns money independently acts commercially. © Erich_Keppler / Pixelio

as Small business owner trade commercially because you want to make money from your activities. Once you start making money, the Treasury is involved too. For this reason, you have to formally apply for a business.

Small business owners also run a business

  • To apply for the business, you need to check whether you may need additional government permits. If you want to work as a broker, you need a broker's license in accordance with Section 34c of the trade regulations. If you are a craftsman, you must be entered in the crafts register, unless the law exceptionally waives the master's title.
  • The fee for registering your trade is around EUR 20 to 40 and varies from municipality to municipality.
  • The trade supervisory authority automatically informs the tax office of the fact that you have applied for a trade. The tax office will send you a questionnaire and ask for information on the form in which you are working and what sales you are likely to expect. Now you have a way to minimize your tax expense.

Apply for the small business regulation

  • You can claim the small business regulation. The prerequisite is that your turnover in the year of registration will not exceed € 17,500. You can add the value added tax to this amount, which you can at least theoretically claim for your commercial services.
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  • However, your sales must constantly be in this order of magnitude. If you exceed the amount, you will be liable for sales tax.
  • If you take advantage of the small business regulation, you do not need VAT on your invoices and do not need to collect any VAT and certainly not to the tax office to dissipate. The tax office will give you the sales tax to compensate for the fact that it is relieved of bureaucratic burdens for your business activities.
  • Conversely, you are then also not allowed to claim input tax, i.e. the sales tax that you pay yourself when you pay third-party invoices for your own needs.
  • You are then only obliged to submit an income tax return to the tax office after one calendar year and to state your sales. You are therefore generally liable for income tax.

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