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IllustratorInMunich posted a topic in FinanceHi all, I am a freelance illustrator and am looking for someone to kindly validate whether my understanding of invoicing clients is correct given my particular situation. Before I start, I want to say a big thank you to everyone here on Toytown - most of the knowledge I've pieced together has come from excellent posts on this site. Background: Since my income will be below the 17,500 Euro limit, I have opted as a kleinunternehmer not to charge VAT. As an illustrator I will mainly be working with foreign clients (businesses and also private customers). I have applied for and received my Steuernummer. I have also applied for a USt-ID to facilitate working with international clients. Just for maximum clarity, I am living in and working from Germany, and providing clients with digital files containing my illustrations. My main clients will be publications such as magazines. --- The following is my understanding of how I should invoice businesses and private customers in Germany and abroad as a Kleinunternehmer. In addition to the general required information for an invoice, on all invoices I plan to: a ) Use my USt-ID instead of my Steuernummer b ) Never charge VAT, under any circumstance I realize that I generally need to provide a reason for not charging VAT. Here is how I plan to do that in various scenarios: 1) If my client is German (both businesses and private customers), German VAT would generally be due (for both B2B and B2C), so on my invoice I will: - state "Gemäß § 19 UStG wird keine Umsatzsteuer berechnet" - not charge VAT 2) If my client is a business located elsewhere in the EU (ex: in the UK), this is a B2B situation and the supply of services is taxed at the business' place of establishment. Therefore the recipient is responsible for accounting for VAT according to the "reverse charge" procedure. On my invoice I will: - state "VAT reverse-charged: tax liability of the recipient of the services" - state the USt-ID of the client - not charge VAT - In this situation, there is no need to mention the line "Gemäß § 19 UStG wird keine Umsatzsteuer berechnet" on the invoice, as I am not charging VAT for the previous reason 3) If my client is a non-EU business (ex: in the US), the place of supply is at the business' place of establishment. The place of supply is thus outside the EU and no VAT is due. I will: - not charge VAT - NOT mention "Gemäß § 19 UStG wird keine Umsatzsteuer berechnet" (nor the reverse-charge procedure) on the invoice. I do not need to state a reason for not charging VAT in this case. 4) If my client is an EU or non-EU customer (private person), this is a B2C service taxed at the supplier's (my) place of establishment. Therefore German VAT would generally be due. However, as a kleinunternehmer I am exempt from paying it. On the invoice I must: - state: "According to § 19 UStG no VAT is charged" - not charge VAT --- I believe I have pieced most of it together correctly, but I would greatly appreciate feedback. Thank you in advance to anyone who can comment on whether a), b), and 1) - 4) are correct.
java10 posted a topic in BusinessSince I have questions (and there will be more) on this topic, I thought it would make sense to start a single topic which would revolve around general idea of performing IT and similar activities under a Gewerbe, with additional answers to questions applicable to any other type of Gewerbe. So here are a couple of questions to start with: -- In a form to be submitted to the Finanzamt (after the initial Gewerberegistrierung), there is a field: 2.4 Handelsregistereintragung which is about (as I understood it) the submission to the Chamber of Commerce. The question: Do all Gewerbe have to register with Chamber of Commerce? What are the regulations? -- My colleague told me one does not need to open any special bank accounts for a Gewerbe, a private account is enough and can be freely used. Btw, he works as a IT freelancer, maybe that is how he got this impression. The question: Is this true? As a matter of fact, I have visited my bank (Sparda Bank) this morning and: a) They told me the person running a Gewerbe would need a Geschäftliches Bankkonto, b-) They don't provide these types of accounts (only private) Subquestion: If one MUST open a Geschäftliches Bankkonto, which bank do you recommend? Is this online bank (N26) good for this purpose (a credit card would also be needed, for eg. overseas Internet payments)?
Bear with me, my situation is a bit complicated (or perhaps it isn't and I am just making it more confusing than it is!) Some basic background information that is explained in more depth below: • I am a US citizen, and have been living in Germany since December 31 of 2017 • I was a freelance opera singer in the USA, and now am working since September of 2018 at the Staatsoper Stuttgart Fest in the opera house. • In 2016 I started an online business side-job where I produce and sell PDFs of Classical music (www.ossiaeditions.com). The business isn't registered in the USA because it was just running as a sole proprietorship, as in, simply operating under my name. • Since living in Germany, I have started working freelance also with a very well known classical music publishing house, performing the same work as I do with my online business (music arranging/editing) Now the situation explained with more detail: Not sure how to address this predicament here in Germany... I am a US citizen, living in Germany since the end of 2017. It's always been a side job to my main job, a freelance musician (opera singer). At the very end of 2017, I moved to Europe and have been living in Germany since then, now working at the Staatsoper Stuttgart where I am Fest in the opera house there (have been working there since September of 2018.) Through this time, I have continued to produce music and sell PDFs on my website, but as my domicile had been in Germany for all of 2018, "technically" this was income earned in Germany as it is under my name (even though the money is very international, coming from dozens of different countries from the online sales). I never earned an outrageous amount of money from this side job, each year less than $10.000, and I don't anticipate ever really breaking that threshold as my customer base is quite niche (and it is more of a hobby-job). On top of this, since I have lived in Germany, I have started doing freelance work for a very well known classical publishing house. This work is absolutely identical to the work I do with my online business, music editing/arranging. In 2018 I did very little with them, but so far in 2019 I have done a great deal more. With my invoices with this company, they have inquired about VAT, and in my research it appears that I am exempt from charging VAT as my "business" qualifies as a Kleinunternehmer, as even between my online business and my freelance work with this publishing company, I do not anticipate crossing the €17.500 threshold. These are the questions I have regarding this situation: 1. Do I need to register my "online business" here in Germany, even though it is a business that started in the USA and has no store front (no physical presence) and simply runs on digital sales and services? 2. Does my work with the German classical publishing house function by operating under my name for the services I am providing, or is it better to also invoice them under the name of my online business? 3. Does the VAT €17.500 threshold refer to the money elusively made from the small business, or does this monetary amount refer to the amount that I am making personally, that is, does the income I am earning through the Staatsoper here in Stuttgart also count? 4. As in 2018 I made less than €17.500, and in 2019 I will make less than €50.000, do I still count as a Kleinunternehmer in 2020, or do I without question at that point need to be collecting and paying VAT regardless? Thanks in advance for all your assistance... Just want to make sure that I am doing everything right moving forward, because I am not confident I have been doing things exactly right so far with this move to Germany!