Who is liable for sales tax?
The law in § 1 UStG answers the question of who is liable for sales tax. At least more or less clearly. In order to understand the law, you need to know a few details in each individual case, including the possibilities of tax-exempt sales and the small business regulation.
§ 1 UStG finally determines which sales are taxable, so that it also emerges who is liable for sales tax. This rule finds its exception, as far as in §§ 4, 4b, 5 UStG tax exemptions are determined and in § 19 UStG the small business option is granted. So all in all, tax-fiscally legally complex. Hence one after the other.
All commercial activities are subject to VAT
- Deliveries and other services performed by an entrepreneur in Germany against payment within the scope of his company are subject to sales tax (§ 1 I UStG). The services include, in particular, services. This can also be in an omission or in the toleration of an act (you grant your neighbor against Payment of compensation a right of way) or a condition exist (for example granting of Patents).
- Entrepreneurship is a prerequisite. The law includes everyone who carries out a commercial or professional activity independently in order to generate income. The intention to make a profit does not necessarily matter. If you auction your household effects on eBay, you are commercially active once a certain number of sales have been made. Then you are an entrepreneur and are liable for sales tax.
Anyone who fulfills an exception is exempt from sales tax
- The law exempts certain processes from VAT. These sales are described in §§ 4, 4b, 5 UStG. This is particularly intended to avoid double taxation. This includes sales that fall under the real estate transfer tax or insurance tax law as well as sales from the rental and leasing of property or sales from medical professional activities. To check your situation, please read the case report in § 4 UStG.
- Even those who work as small businesses are not subject to sales tax (§ 19 UStG). You are a small business owner if your sales in the past calendar year did not exceed 17,500 And at the same time will probably not exceed 50,000 euros in the current calendar year will. Since the calculation according to § 19 I 1 UStG is based on gross sales, the limits are reduced for net sales (net limit at 19 percent tax rate = 14,705 euros or 42,016 Euro). You are also liable for sales tax if you opt for tax liability.
The tax law is like an impenetrable jungle. Would you like to ...
If your sales are taxable according to § 1 I UStG and not tax-exempt according to §§ 4, 4b, 5 UStG and the small business regulation of § 19 UStG does not apply, you are subject to sales tax. The tax arises at the end of the pre-registration period in which the delivery or other service was carried out. The tax rate is regularly 19 percent and 7 percent for certain sales (food, books). If in doubt, seek tax advice. This text can only present the basic situation and does not replace tax advice in individual cases.
