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Lukas Bartels
Published:
11/2021
3 mins
Since 2021, VAT has been raised again to 19%. You can find out the exact effects here.
The Covid-19 virus - Corona - had a firm grip on the world and therefore also on Germany in 2020. In order to stimulate the economy and consumer buying behavior, the FederalFederal government has therefore been decided with effect from July 1, 2020, to increase sales or vat to reduce (VAT).
The advantages lie primarily with the end user, who VAT reduction should save money, at least in theory. However, this results in some stumbling blocks in the transitions between 16% and 19% tax rate, which must be considered. We'll explain it to you!
In your order processing documents, such as Offers and invoices, calculate with net amounts and explicitly show sales tax (= value added tax) at the end.
Unless you are a small business owner exempt from VAT in accordance with §19 UStG, you should therefore pay close attention below.
So for you just one continuous post?
Or is there more to consider when writing an invoice?
Binding for your bookkeeping Are yours in the end Invoice documents. Of course, it is still of interest to your customers that you show the correct tax when calculating offers and order confirmations.
The advantage is very clear: your offers will be a little cheaper from July.
That should be positive for order surcharges impact on private customers. Even though you may barely be able to save yourself from assignments, it's certainly a good thing. Because hey — it's better to do a lot than do nothing at all, right?
In principle, the standard rate of 19% or 16% is usually the relevant one for you as a craftsman.
The reduced tax rate applies to primary care products and services, which are rarely used, particularly in construction services.
If you are unsure, it is best to talk to your tax advisor about this as well.
By the way: In 2019, the state earned 183 billion euros in sales tax at 19%. Regardless of the weak economy in 2020, the state is calculating 20 billion euros in missing tax amounts as a result of the cuts.
With so much generosity, the tax office will look closely; after all, the tax gift should reach the end consumer.
There are a few pitfalls here that you need to know and consider so that you don't accidentally commit a tax offense and risk punishment.
You send your customer a 19% sales tax invoice for a service in August 2020 and the customer pays the full amount. However, your accounting/tax advisor records the net amounts with the correct sales tax of 16%. The turnover vis-à-vis the tax office is shown too low and you fall into tax trap No. 1.
You completed your service with the customer in June 2020, but you won't be able to bill until July. 19% sales tax would be due, but you only report 16%. Here too, the state is missing out on 3%. Tax case number 1 again.
In the case of type No. 2 (input tax amounts listed too high), you should always make sure that your incoming invoices are also correct - i.e. that your suppliers show their invoices with the correct sales tax in each case.
Do you receive invoices that are subject to the reverse charge procedure in accordance with §13 b? Here, the tax burden lies with you as a beneficiary, e.g. for construction services. Here you have to make sure that the correct tax rate is recorded in your accounting department. Otherwise, tax trap No. 2 is imminent here too.
In principle, the tax rate depends on when the sales tax was generated. In concrete terms, this means:
As a rule of thumb, you can remember that the time of full delivery of your service/ delivery is decisive.
Deliveries are considered delivered when the recipient has full access to them - in good German: He has received the delivery.
Services are considered to have been provided upon acceptance. In the case of construction services, for example, an acceptance, usually with a protocol, is the decisive deadline.
Here too, it counts: The deadline is when the service is completed.
If there were no partial services with own approvals, the completion of the order and thus the sales tax listed in the final invoice counts for the entire order value.
You start your order in May 2020, create an advance invoice in May and June with 19% each (which is correct). In July 2020, you will complete the order, including acceptance. Accordingly, 16% VAT must be calculated for the entire order in the final invoice. You must list and sum up all payments, including their respective tax, in the final invoice. The remaining payment amount then results from the difference in this sum and the total order value at 16% VAT.
The entire control part can easily lead to confusion. The examples try to show this by way of example. In any case, talk to your tax advisor, accountant and/or other companies - safe is safe!
The idea of the federal government is certainly good, but it can lead to some confusion among companies.
Make sure that your software solution for calculating offers and invoices includes the new sales tax.
Then make sure that the invoice date is not decisive for the correct tax rate, but the day on which you have completed your service/delivery.
If you follow this guidelines and talk to your tax advisor to be on the safe side, everything should go well.
Happy work! Stay motivated and curious.
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Cover photo: edited image, by Steve Buissinne from Pixabay
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