May 9, 2021

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Who has to submit income and sales tax returns

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You should create and submit tax returns online using tax software. The relevant laws regulate whether you have to submit tax returns. As an entrepreneur, you are obliged to submit an income tax return if you have received income from commercial or freelance work or from an agricultural or forestry business.

Proper Submission of The Taxes

Submitting the declaration does not mean that you will pay income tax. In the case of low income of, for example, less than 410 euros per year, there is no tax assessment due to the hardship compensation. The obligation to submit an income tax return exists even if no income tax has to be paid.

As an entrepreneur, you are generally subject to sales tax. You are therefore obliged to submit a tax return. Exceptions apply in accordance with the Sales Tax Act (4 UStG) for a few sales tax-exempt professions such as doctors or insurance agents.

The obligation to submit the VAT return is not the result of advance VAT returns submitted to the tax office. The legislator requires these advance tax returns if a sales tax liability from the previous year exceeds certain limits. With the tax app you can find the best deals now.

Forgot VAT return – what to do?

As a self-employed person you can only decide freely in a few cases, would you like to:

If the tax liability from sales is over 7,500 euros, an advance VAT return is due every month. If the sales tax liability is less than 1,000 euros, the annual sales tax declaration is sufficient. All others submit quarterly.

Please note as a small business owner: Even if you as a business owner can claim a VAT exemption due to the small business regulation, the obligation to submit a VAT return does not cease to apply. When declaring as a small business owner, it is sufficient to enter the turnover for the last two years (year of declaration plus previous year).

Income tax returns – note the submission deadlines

If you handle all your tax matters yourself, the general deadline for income tax matters is the end of May.

In the event of delays, the tax authorities can set penalties. It becomes even more uncomfortable when official tax estimates have to be delivered.

You can use a deadline extension if you prepare your private and business tax documents with the support of a tax advisor. The tax office may grant you time until February of the coming year.

In the case of the self-employed, the determination of profits and the compilation of the necessary documents are usually done faster than collecting receipts and determining the advertising costs for employees. This is because you may have already done most of your accounting homework by the current fiscal year. That is the prerequisite for preparing the sales tax returns that are due each month.

Transmission by electronic means

The income tax return plus attachment (determination of profit) and the sales tax return must be submitted electronically to the tax office (EÜR since 2012).

You can use the same software to complete the annual sales tax return and send it to the tax office that you use for advance sales tax returns. If you want to forego electronic transmission, you must submit a reasoned application to your tax office. If approved, you will receive the required paper form from there.

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