In order to make the complex described process a little easier, let’s use an example, there is an entrepreneur, a dealer and the customer. Now the entrepreneur sells a dealer for dental chairs a chair, which he offers again a dentist, the customer.
Calculate VAT: Use our formulas
The entrepreneur issues an invoice for 200 euros including VAT for the dental chair sold. The trader has to pay the entrepreneur 200 euros + 38 euros VAT.
- The entrepreneur must then report the 38 euros VAT to the tax office via the sales pre-registration and pay the amount to them. The dealer now sells the dentist’s chair to the customer for 300 euros and also charges 19% VAT.
- The dentist has to pay an invoice for 300 euros plus 57 euros VAT. Since the dealer has already paid the entrepreneur VAT of 38 euros, he can deduct this: 57 euros – 38 euros = 19 euros. He must now pay this amount to the tax office. Using the sales tax calculator is essential there.
- The value chain can now be continued at will until the goods reach the customer.
What is the difference between sales tax and sales tax?
The terms sales tax and sales tax are used synonymously. Strictly speaking, however, a subtle difference can be made out. With sales tax, a tax is levied on sales for every prior sale. In the case of several sales, the sum accumulates. However, this procedure is not used in this country.
In contrast, with VAT, only the VAT created is taxed, as the tax that has already been paid can be deducted. In Germany, the terms sales tax and sales tax are used synonymously.
Value Added Tax Act: The anchoring for statutory value added tax
Statutory issues relating to VAT are not anchored in a Value Added Tax Act, but in the Value Added Tax Act (UStG). This is made up of seven sections and regulates which goods must be taxed, when a tax exemption applies, which special regulations there are and which penalty threatens in the event of violations.
The following sales are subject to sales tax:
- Deliveries and other services that an entrepreneur in Germany carries out for remuneration within his company. Taxability does not apply if the transaction is carried out on the basis of a legal or official order or is deemed to have been carried out according to legal regulations
- (No longer applicable)the import of objects in Austria or in the Austrian areas
- Intra-community acquisition in Germany against payment.
Calculating VAT is simple
UStG regulates when an entrepreneur is legally regarded as such and therefore has to pay VAT. According to this, an entrepreneur is a person who carries out professional or commercial activities independently. Every activity is considered to be one that generates income. Whether there is also an intention to make a profit is irrelevant.
In contrast, a non-self-employment is exercised if people in a company incorporated are and have been an entrepreneur available work force and also get appropriate instructions.