Steuer for Ebay Seller -- (no longer a) Kleinunternehmer rules

213 posts in this topic

Hello,

 

I was studying in China for the last few years, and in 2016 my husband, who remained in Germany, started selling on Ebay. In the summer when I came back we went to the KWR or some similar office (kind of forgot!) and did a Gewerbeanmeldung, because honestly I'm not totally sure what we are supposed to do administratively and that seemed like the right step. Then I was abroad again and am not sure what took place since then. Now I'm back and trying to sort out all the tax implications-- namely Einkommensteuer and Umsatzsteuer.

 

My questions regarding Umsatzsteuer are:

1. How exactly do I apply this Kleinunternehmer rule of "if in the previous year he earned an Umsatz (total income without subtracting expenses) less than 17,500€ and is expected to earn less than 50,000€ in Umsatz, then he doesn't need to pay Umsatzsteuer". Last year his Umsatz was just over 20,000€, and I estimate this year it will be about double that. So does he need to backpay Umsatzsteuer on last year or just start paying it this year? Where do we go to sign up for this and do we pay in monthly installments or in yearly lumps sums?

2. Supposing we do need to start paying or even backpay Umsatzsteuer, from what I have read and tried to understand in German, we can offset these costs by charging them to the customer? Any idea how to do that on ebay? Is there an option to tick that will add a 19% tax to their purchase, or do we just have to manually factor it into the sales prices?

3. I don't really understand the ins and outs of Ebay, and he's from Asia and has some major language barriers, so I'm not entirely sure what his status is on Ebay. I know he doesn't have an Ebay shop... so does that make him a "private seller"? Do I need to change this status?

 

Thank you very much. Those are my most important questions at the moment, and if you happen to know a thing about the following questions, that would also be of much help:

 

My questions regarding Einkommensteuer are:

 

1. In the past when I worked as a freelancer, I simply filled out Anlage S and attached a sheet listing my income and expenses. I presume this was called an "Einnahmen-Überschuss Rechnung" although perhaps it was something even simpler? A German friend, former accountant or tax advisor, had helped me to write it and it merely said "Zu Anlage S" at the top and listed my Einkommen and Ausgaben. Now I'm trying to figure out how to make such a Zusatzblatt for my husband for his Ebay sales and a big question crops up: As he has a small workshop where he manufactures the majority of the parts in Vietnam, can he subtract the costs of his workshop in Vietnam (employees, machinery, shipping to Germany, etc.)? 

2. I know we do not have to do a Bilanz, because his Gewinn is not over 50,000€ and his Umsatz is not over 500,000€. So does that mean that the paper we have to draft is called an Einnahmen-Überschuss Rechnung or is there an even simpler option?

 

I already sent an email to LOHI (http://www.lohi.de/lohnsteuerhilfe.html) to see about signing up for a membership and getting advice on these Einkommensteuer questions. I'm waiting on an answer.

 

In the meantime, advice on Umsatzsteuer firstly would be much appreciated. And secondly, tips on Einkommensteuer would also be appreciated.

 

Thanks a bunch,

ML

 

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First off, if he didn't submit a Fragebogen zur steuerlichen Erfassung to the Munich Finanzamt in order to get a Steuernummer, he has to do that first.

Details linked from this post:

Umsatzsteuer:

  1. Provided he made this 20,000€ turnover by being self-employed the whole of 2016, he should have been forwarding VAT to the German state starting with 1. January 2017. If, on the other hand, he made the 20,000€ profit by being self-employed, for example, only during the last 3 months in 2016, then his pro-rated yearly turnover for 2016 was 12/3 * 20,000€ = 80,000€, which means that he broke the serious 50,000€ limit already in 2016 and he would have to retroactively forward VAT also for 2016.

    Please read the section "With Elster you can do:" in the Toytown Elster wiki and then come back here.

    You simply start submitting VAT annnouncements (= Umsatzsteuer-Voranmeldungen), they are filed monthly by the 10th for the preceding month. So you would have to file the ones for January, February, March immediately, and the one for April before May 10th.
    You also have to transfer the VAT you owe to the state every month before the 10th into the Finanzamt's bank account, or you give the Finanzamt the permission to take the VAT that you announced in the Umsatzsteuer-Voranmeldungen out of your bank account every month by giving them a SEPA-Lastschriftmandat.

    You can either hire a Steuerberater to do your bookkeeping and file your monthly VAT announcements (will cost around 100€ a month), or you do your bookkeeping yourself in Excel, get your Elster certificate, see here (apply using your Steuer-Identifikationsnummer), give the Finanzamt a Lastschriftmandat and then file the VAT announcements yourself electronically, either using the free downloadable ElsterFormular software wher you then submit it using your Elster certificate (once you have it), or use your Elster certificate (once you have it) to log into ElsterOnline.de and do it online. 
     
  2. It comes out of you turnover, your prices to end user customers have to include 19% VAT.
    So if, for example, he took in 3,000€ from his ebay shop in January 2017, and bought supplies and services for 1,190€ in Germany (and has invoices where the 19% is shown for the stuff/services he bought) in January 2017, he should have forwarded [(3,000 - 3,000/1.19) - (1,190 - 1,190/1.19)]€ = 478.99€ - 190€ = 288.99€ to the Finanzamt before 10. February 2017.
     
  3. Yes, you should update it since he has a Gewerbe. He is no longer a private seller. This will have implications, because he will then have to take back things customers don't like, and the ebay fee structure is different for businesses.

The limit for having to keep books has in the meantime been raised to 60,000€ profit or 600,000€ turnover, see §141 AO: https://www.gesetze-im-internet.de/ao_1977/__141.html

This means that as long as he's under these limits you can simply do your accounts in Excel. But you will have to these Excel accounts every month because you will need the numbers to fill in the monthly VAT announcement.

 

Einkommensteuer:

  1. Yes, these are business expenses.
     
  2. No, he's no longer a Kleinunternehmer where he could get away with using a formless piece of paper to calculate his profit. Use the Anlage EÜR (= Einnahmen-Überschuß-Rechnung) for his profit calculation. Basically, from 2017 he's in the green area of the Toytown Elster wiki. In 2016, he was still in the turquoise area (provided his pro-rated 2016 turnover wasn't over 50,000€, if it was, he also has to do his 2016 tax return according to the green section).

 

Something you forgot about is Gewerbesteuer

It is due on all his profit that exceeds 24,500€ and is paid to the city of Munich: https://de.wikipedia.org/wiki/Gewerbesteuer_(Deutschland)

He will get a part of the paid Gewerbesteuer back through an income tax credit, so don't forget to fill in the Gewerbesteuer that's due in line 17 of Anlage G so that he gets that tax credit.

 

The Lohnsteuerhilfeverein is forbidden by law to help self-employed people. See that word "Lohn" in there? It means wages, i.e. they are only allowed to help employees.

This means you either:

  • have to hire a Steuerberater (costs about 2,500€ a year including double-entry bookkeeping - which they have to do since their DATEV software needs it as input to create the VAT announcement - and monthly VAT announcements), or
  • you do everything yourself.

 

*************************************************************

 

Further reading (please read the thread to the very end):

If he has public health insurance, they will want to know that he started being self-employed in order to charge him according to his profit:

 

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Wow, very thorough and detailed answer. Thank you. 

Quote

First off, if he didn't submit a Fragebogen zur steuerlichen Erfassung to the Munich Finanzamt in order to get a Steuernummer, he has to do that first.

I'm not sure if he submitted a " Fragebogen zur steuerlichen Erfassung ". Should I call a certain number at the Finanzamt to ask or make an appointment? (Don't really know the standard way of communicating with them.)

Quote

Provided he made this 20,000€ turnover by being self-employed the whole of 2016, he should have been forwarding VAT to the German state starting with 1. January 2017.

He made this 20,000€ over the whole of 2016, Jan-Dec. So that's good news that he doesn't have to backpay Umsatzsteuer for that year!

Quote

Please read the section "With Elster you can do:" in the Toytown Elster wiki and then come back here.

Ok, I had a look through it, and am going to look through it a few more times and take the steps. Should I download under the column where it says "im Gesamtumfang"? https://www.elster.de/elfo_down.php

Quote

You simply start submitting VAT annnouncements (= Umsatzsteuer-Voranmeldungen), they are filed monthly by the 10th for the preceding month. So you would have to file the ones for January, February, March immediately, and the one for April before May 10th.

Ok, so I read this on the Elster page:

Quote

9. at the right choose for what month you want to announce your VAT (e.g. Mai)

So I'm going to be able to select months January through March 2017 even though they are past, right? But I don't need to do this for 2016, right? Do I need to do something to show proof that he didn't owe VAT in 2016?

Quote

It comes out of you turnover, your prices to end user customers have to include 19% VAT.
So if, for example, he took in 3,000€ from his ebay shop in January 2017, and bought supplies and services for 1,190€ in Germany (and has invoices where the 19% is shown for the stuff/services he bought) in January 2017, he should have forwarded [(3,000 - 3,000/1.19) - (1,190 - 1,190/1.19)]€ = 478.99€ - 190€ = 288.99€ to the Finanzamt before 10. February 2017.

1. Ok, so that means instead of listing a product for 24,99€ on Ebay, for example, he should sell it for 29.74€ to take into account the 19% Umsatzsteuer he has to pay every month, or else accept that he loses 19% off the 24,99€ and makes only 21,00€ (minus other costs), right?  There is no option to tick 24,99€ + 19% Mehrwertsteuer, I believe. 

2. The math had me stumped for a second because I kept thinking that the Umsatzsteuer for an Umsatz of 3000€ would be 19% of 3000 (3000€ * .19 = 570€), until it finally hit me that it is an amount less than 3000€ (2521€) added to 19% of itself (479€) that adds up to 3000€. This website helped a little:  http://www.vatcalculatorplus.com/Calculate-VAT.html  Say for example that he made no purchases (not the case) and could not deduct any paid Mehrwertsteuer, then is the Umsatzsteuer that he owes on 3000€ 478,99€? It is not, 570€, right?

3. To my knowledge, he doesn't buy too much stuff in Germany, but all of the shipments he makes from Vietnam get stopped at the airport for customs tax and in addition to the customs tax, they charge 19% Einfuhrumsatzsteuer. I figured out that this is 19% of the (cost of the product + shipping costs to Germany + customs tax). Can this also be subtracted from the Umsatzsteuer like in your above calculation?

Quote
  1. Yes, you should update it since he has a Gewerbe. He is no longer a private seller. This will have implications, because he will then have to take back things customers don't like, and the ebay fee structure is different for businesses.

Ok, I had a look at his "eBay-Konto Perönliche Daten" and he is listed as a "Gewerbliches Konto", and I know he takes returns. So perhaps it is possible to have a business account without owning an eBay shop. Does anyone know if he is required to have an eBay shop in addition? I'm assuming not, but I will google this more.

 

 

Quote

 

Einkommensteuer:

  1. Yes, these are business expenses.

 

Great! So can I just absetzen (deduct) these expenses directly like Fahrkosten (travel costs) and office supplies? I don't need to deduct them in yearly installments like I need to for laptops and smartphones, right? And for proof do Vietnamese bank statements showing transfers work, or do I need paper receipts? He said it can be hard to get receipts for purchases in Vietnam because where he is from they are just farmer folk dealing in cash without pens and paper on hand, but I'm trying to insist that he ask for them. It might be little scraps of weathered paper with indecipherable writing (Vietnamese) on them though.

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 Use the Anlage EÜR (= Einnahmen-Überschuß-Rechnung) for his profit calculation. Basically, from 2017 he's in the green area of the Toytown Elster wiki. In 2016, he was still in the turquoise area...

Great! Thank you.

Quote

 

Something you forgot about is Gewerbesteuer

It is due on all his profit that exceeds 24,500€ and is paid to the city of Munich: https://de.wikipedia.org/wiki/Gewerbesteuer_(Deutschland)

 

Ok, I don't believe his profit has reached that amount. Is this due at the end of the year when we know what his actual profit was, or is it also due monthly like the Umsatzsteuer?

Quote

 

The Lohnsteuerhilfeverein is forbidden by law to help self-employed people. See that word "Lohn" in there? It means wages, i.e. they are only allowed to help employees.

This means you either:

  • have to hire a Steuerberater (costs about 2,500€ a year including double-entry bookkeeping - which they have to do since their DATEV software needs it as input to create the VAT announcement - and monthly VAT announcements), or
  • you do everything yourself.

 

Well, in that case, at this point I'll have to opt for doing it myself, because I'm not even sure if he is making a profit, especially with Umsatzsteuer on top.

Quote

If he has public health insurance, they will want to know that he started being self-employed in order to charge him according to his profit.

He is employed and does Ebay on the side. Does this still mean they need to increase the cost of his insurance? I need to figure out if he has a profit and how much it is!

 

As soon as I get the right version of Elster downloaded I'll get started with making these VAT payments.  I will follow the Elster wiki, but I hope it's ok if I come back here with questions as I get the process underway! He doesn't ever get a percentage of this tax back and also cannot deduct it on his EÜR, right?

 

Then I have to work on our 2016 tax returns and his EÜR.

 

Thanks again very sincerely for your help! I'm due for a baby next month and am trying to get these issues solved first, and your assistance really means a lot.

 

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If he had submitted that Fragebogen, the Finanzamt would have been after him long ago to pre-pay the estimated Einkommensteuer (based on his estimated business profits which he would have filled into the Fragebogen).

  1. Yes.
  2. Yes.
  3. Yes, you claim for the Einfuhrumsatzsteuer that you paid in line 58 of your monthly Umsatzsteuer-Voranmeldung

Yes, you only have to depreciate Anlagegüter, i.e. things like a computer which you use for more than a year. Merchandise that you sell on is never depreciated.

You only depreciate stuff you use yourself if it cost (including 19% VAT) more than 487.90€, this is the limit for a geringwertiges Wirtschaftsgut: https://www.rechnungswesen-portal.de/Fachinfo/Anlagevermoegen/Geringwertige-Wirtschaftsgueter-GWG-Beispiele-und-Buchung.html

Merchandise that you bought in order to sell on is never depreciated over several years, but deducted completely as a business expense the year you bought it (as long as he remains under the 60,000€ non-bookkeeping profit limit - once he exceeds it things are very different and you will need to do a yearly inventory and a Bilanz - which means hiring a Steuerberater unless one of you has an accounting degree and therefore the knowledge to do it yourself).

 

Bank statements help, yes.

In a pinch he can write Eigenbelege, but in the future he really should get invoices or at least receipts for the stuff he buys. They should be legible, especially the numbers, and if the farmer can't write their signature your husband should carry around an inkpad so that they can put their fingerprint on the receipt.

Then pencil in German translations of what it was he bought onto each invoice/receipt.

 

Gewerbesteuer will be due after his income tax return has been processed.

If he does end up owing any, the city will make him pre-pay it in the future, based on last year's amount.

 

If he's a fulltime employee, the Krankenkasse will only charge him more once his self-employed profit exceeds his yearly gross salary.

 

Download the "im Gesamtumfang" version of ElsterFormular.

 

Take care that in Anlage EÜR, the amounts are usually net, i.e. without VAT, since the VAT goes into separate lines of the Anlage EÜR, see below.

 

If he takes in 40,000€ including VAT from his customers in 2017, then his entry into line 14 is:

40000€/1.19 = 33.613,45

 

All the VAT he takes in, either from his customers (you put it into line 16 of Anlage EÜR) or from the Finanzamt (goes into line 17, but this happens only if during a month he sold little or nothing, but he still bought things: in that case his VAT due becomes negative and the Finanzamt simply reimburses him [VAT_he_took_in minus the VAT/Einfuhrumsatzsteuer from the stuff he bought that month]) is part of the income side (= Betriebseinnahmen) of his EÜR.

 

The VAT he paid on stuff he bought goes into line 49 of Anlage EÜR.

The VAT he forwarded to the Finanzamt is part of his expenses side (= Betriebsausgaben), it goes into line 50.

 

*************************

 

Another niggle: does his visa even allow him to be self-employed?

In Munich, the Finanzamt isn't nosy in that direction, unlike Berlin where they want to see your visa when you apply for a tax number for being self-employed.

But the Ausländerbehörde won't get to know about it from the Finanzamt, they don't communicate.

 

*************************

 

Sorry, but that May deadline is a bit hard to keep.

 

He needs an Elster certificate (or do you maybe already have one, that one could also be used), and it takes around 3 weeks until you get it.

Both the Umsatzsteuer-Voranmeldungen as well his Umsatzsteuererklärung, the Anlage EÜR and as your family Einkommemsteuerwrklärung will have to be submitted completely electronically, i.e. signed with a Elster certificate.

 

He also needs a business Steuernummer under which he submits the VAT announcements and which he has to mention in all invoices he writes (if an ebay customer wants an invoice he has to give them one!). He applies for the business tax number with the Fragebogen, take care to mark lines 152 (Istversteuerung) and line 153.

Also mark line 156 to get a VAT-ID (this will be allocated by the Bundeszentralamt für Steuern, takes up to 6 weeks, and is not yet a must, but nice to have (you can write it instead of your Steuernummer into your invoices, and if you buy stuff in the EU for your business you get said stuff VAT-free from that EU country if you can tell the seller your VAT-ID), so get one).

It will take at least 3 weeks to get the business Steuernummer.

 

Only after you have the business Steuernummer can you start submitting the monthly VAT announcements. Well, you are also able to submit them under your private Steuernummer, but that would only create a mess once you switch over to the business Steuernummer, so better wait and submit them under the new business Steuernummer.

 

In a pinch (if time runs out) you can submit under your private Steuernummer, the Finanzamt will then assign him a business Steuernummer after processing the income tax return.

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Once again, thank you for all the details. I'm getting started now.

 

In his very disorganized stack of papers I just found this letter (unfortunately unable to upload even though it's only 80kb):

Quote

Sehr geehrte Steuerzahlerin,

sehr geehrter Steuerzahler,

 

das Finanzamt hat Ihnen die Steuernummer

***/***/*****

zugeteilt.

 

Sie gilt für:

Umsatzsteuer

Gewinnermittlung nach § 4 Abs. 3 EStG

Bezeichnung des Betriebs: Versand- u. Internet-EH

 

Bitte geben Sie immer die Steuernummer an, wenn Sie sich an das Finanzamt wenden. Ihre Identifikationsnummer (IdNr. ** *** *** ***) ändert sich hierdurch nicht...

 

That means he has a business Steuernummer for VAT announcements. That means we just need to apply for the Elster certificate now. Do I need 3 separate Elster certificates: one for me, one for him, and one for his business? We have 4 numbers on hand: his tax id number, my tax id number, our Steuernummer (I assume we just have one because we are married), and his business Steuernummer.

 

I'm following the thread  How to get your ELSTER digital certificate and followed the steps:

1. "zur Registrierung"

2. "Schritt 1: Angaben zu Person und gegebenenfalls Organisation"

3. "Persönliches Zertifikat" (I don't need to use "Nicht-persönliches Zertifikat (Organisationszertifikat)" for his business, right?)

4. "Registrierung mit Identifikationsnummer" (There is no longer the option "Registrierung mit Steuernummer")

5. Filled out the form and clicked "weiter"

 

But I haven't clicked "Absenden" yet, because I want to be sure that I am doing this correctly first:

1. Is it correct to do "Persönliches Zertifikat" and not "Nicht-persönliches Zertifikat (Organisationszertifikat)"?

2. How many Elster certificates do we need for each kind of service (Einkommensteuererklärung and VAT-Voranmeldungen) and does it matter whether we use his tax id number, my tax id number, our Steuernummer, or his business Steuernummer? I know you said to use his business Steuernummer to get an Elster certificate for his VAT-Voranmeldungen, but like I said there is no longer an option under "Persönliches Zertifikat" to register with a Steuernummer, only "Registrierung mit Identifikationsnummer".

 

Oh, one thing I still don't quite understand... what do I need to do to settle that he doesn't owe VAT for 2016? Fill out a form? Call the Finanzamt?

 

Thanks a bunch! Making headway!

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No, you just need to apply for one, his. He is an Einzelunternehmer, not a juridical person like a GmbH or an AG, so he needs a "Persönliches Zertifikat".

You apply for it using his Steuer-Identifikationsnummer (this number is also written on the yearly Lohnsteuer-Bescheinigung he gets from his employer).

 

You then use his Elster certificate to "sign" and then electronically submit via Internet:

  1. monthly Umsatzsteuer-Voranmeldungen
  2. yearly Umsatzsteuererklärung
  3. yearly Anlage EÜR
  4. yearly Einkommensteuererklärung (this also includes your income, since you will do a joint family tax return)

Kleinunternehmer do not pay VAT.

The Finanzamt will see that he was a Kleinunternehmer in 2016 when they see his low turnover, which he will fill into line 34 of his 2016 Umsatzsteuererklärung.

If you look carefully into the turquoise section of the TT Elster wiki, you will see that even a Kleinunternehmer has to fill in an Umsatzsteuererklärung.

 

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Ok! Thanks so much.

 

So... now I have:

1. His business tax number

2. His Elster certificate

3. His VAT-ID number

 

As I'm waiting for him to get me all the receipts for the 2016 income taxes, I want to get the 2017 VAT announcements taken care of. Do you have a guide for filling out the 2 page VAT announcement form?

 

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Ok! So--

 

I filled out VAT announcements for January through March so far, and it's fairly simple-- basically, the only 2 numbers that you actually fill in are box 81 (Umsatz from customers before adding 19% VAT) and box 66 (total VAT paid on items bought), right? For example, if his total Umsatz for the month was 1000€, then in box 81 you would fill in 840€ (1000€/1.19). The form then automatically calculates the VAT taken from customers: 160€ (1000€ - 1000€/1.19). And for the amount in box 66, you look at all the receipts and add up the Mehrwertsteuer listed on them, or you add up the total amount paid on all of the bought items and calculate the total Mehrwertsteuer: Total amount paid - (Total amount paid/ 1.19).

 

Here are my remaining Umsatzsteuer questions:

 

1. Line 12: Name -- Should I write his full name or only his last name, and if the full name, which order?

2. Now he has to begin sending all customers an invoice with the 19% Mehrwertsteuer amount and Umsatzsteuer ID indicated, correct? Does this include customers outside of Germany or the European Union? If not, does that also mean that he does not need to transfer 19% Umsatzsteuer on these items to the Finanzamt?

3. 

Quote

 

All the VAT he takes in, either from his customers ... or from the Finanzamt ... is part of the income side (= Betriebseinnahmen) of his EÜR.

 

The VAT he paid on stuff he bought goes into line 49 of Anlage EÜR.

The VAT he forwarded to the Finanzamt is part of his expenses side (= Betriebsausgaben), it goes into line 50.

 

I'm a little confused here. All of the VAT he takes in from customers or the Finanzamt goes on the income side, so in the above example, 160€. All of the VAT he forwards to the Finanzamt goes on the expenses side, so in the above example, 160€. So basically that means that all VAT he takes on sales to customers he writes on the income side of his EÜR, then he transfers that amount to the Finanzamt and writes it on the expenses side of his EÜR, correct? So then those two amounts cancel each other out, and the only reason for writing it on the EÜR is to show the Finanzamt that you collected and transferred this tax to them? So essentially this 19% is something you never get back, no matter how low your profit is? It's something you always take out of your Umsatz and transfer to the Finanzamt.

 

I feel like I had a fourth question, but I've forgotten it now :blink:

 

Thank you again for helping me get through this. You've been a life saver.

 

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  1. Line 12: first name, last name, e.g. John Chen
  2. Generally, he has to charge 19% VAT. But in some cases not, so please also read the last part of this post: https://www.toytowngermany.com/forum/topic/300112-kleinunternehmer-will-start-2nd-freelance-job/?do=findComment&comment=3068478
  3. Yes, it usually cancels out. If people "forget" to forward it, the Finanzamt can see it this way. Yes, the VAT you take in is never yours, you just collect it for the Finanzamt.
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Ok, great thank you.

 

He only sells goods, no services, so these would be the rules that apply from your post:

 

Quote

 

  • if you deliver a product to an EU customer then you pay your German VAT, as long as you don't deliver more than ...€ worth of products to that country. If you do deliver that much to the other EU country then you have to charge that other country's VAT rate (for example Amazon.co.uk charges German customers the German 19% VAT rate since they deliver wares for more than 100,000€ a year to Germany). In Germany this is laid down in the Versandhausparagraph §3c UStG, see here for an overview of the limits from which you have to start charging that other country's VAT rate (and said VAT will go to the other country's tax coffers!).
     
  • if you deliver a product to an EU business then you do not charge VAT, see innergemeinschaftliche Lieferung here.
     
  • if you deliver a product to a non-EU business or customer then you don't charge VAT, see here.

 

 

 

The last two rules should save him a bunch of money in Umsatzsteuer, because he does sell quite a few things to businesses and non-EU countries.

 

Sorry to be repetitive, but just one last confirmation to be safe: If he sells products on eBay to a non-EU country (US, Japan, etc.) then he DOES NOT need to allocate 19% of the net price of a product to Mehrwehrtsteuer and forward this to the Finanzamt? And the same is true if he sells to an EU business?

 

That's what I see it says above, but just want to confirm!

 

Thanks a bunch :)

 

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Oh, and a couple other questions...

 

1. How does he show evidence that the customer of a transaction is a business, just from the invoice? He previously did not write any invoices and just left his record of transactions on eBay.

2. I'm collecting receipts from him for the 2016 income taxes and got his employees' monthly pay receipts. However, they are in Vietnamese Dong. How should I convert these to Euros? According to the exchange rate today, or?

 

Thanks! :)

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1 hour ago, MLmunich said:

Sorry to be repetitive, but just one last confirmation to be safe: If he sells products on eBay to a non-EU country (US, Japan, etc.) then he DOES NOT need to allocate 19% of the net price of a product to Mehrwehrtsteuer and forward this to the Finanzamt? And the same is true if he sells to an EU business?

 

Yes.

 

1 hour ago, MLmunich said:

1. How does he show evidence that the customer of a transaction is a business, just from the invoice? He previously did not write any invoices and just left his record of transactions on eBay.

2. I'm collecting receipts from him for the 2016 income taxes and got his employees' monthly pay receipts. However, they are in Vietnamese Dong. How should I convert these to Euros? According to the exchange rate today, or?

 

  1. If it is a sale to an EU business, he also has to write the recipient's VAT ID into his invoice. This VAT ID will be checked by the Finanzamt to see whether it really is a business. On top of that, he has to prove that the item reached the recipient, he has to bring additional proof that the items really reached the EU business recipient. This proof is a Gelangensbestätigung that the recipient fills in, signs and then sends back to your husband. These signed Gelangenbestätigungen have to be kept in a safe place, the VAT auditor from the Finanzamt will want to see them - for any exports to EU businesses where you do not have a signed Gelangenbestätigung, he will be treated as if he sold to a EU private customer, i.e. he will have to forward 19% VAT because of that sale.
    His invoice has to contain the phrase "innergemeinschaftliche Lieferung".
    Details in here: https://www.frankfurt-main.ihk.de/recht/steuerrecht/umsatzsteuer_international/innergemeinschaftliche_lieferungen/index.html

    If it is an export to a non-EU country, his invoice has to contain the phrase "umsatzsteuerfreie Ausfuhrlieferung", and he has to bring proof that he really sent it to that non-EU country.
    Details in here: https://www.frankfurt-main.ihk.de/recht/steuerrecht/umsatzsteuer_international/ausfuhrlieferungen/

    In both cases, even though he doesn't charge German VAT on these sales, he still has to announce them in his Umsatzsteuer-Voranmeldung.
    - sales to EU businesses: line 41, field 21 in the Umsatzsteuer-Voranmeldung
    - sales to a non-EU country: line 42, field 45 in the Umsatzsteuer-Voranmeldung
     
  2. Normally, he would have to use the official exchange rates.
    However, there are none for the Vietnamese Dong. So just use the historical exchange rate on that date: https://www.oanda.com/fx-for-business/historical-rates
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You know, if he hasn't already done so it is high time that he applies for his own German VAT ID, he will need it if he continues having business outside Germany, e.g. if he should ever want to buy something from an EU business, since they won't sell it to him excluding that country's VAT if he doesn't tell them his German VAT ID: http://www.bzst.de/DE/Steuern_International/USt_Identifikationsnummer/FAQ/FAQ_Vergabe_USt_IdNr/Vergabe_FAQ_node.html;#faq19376

If he should ever buy something from a non-EU business, he will owe German VAT on it - but at the same time he will get back that owed VAT since it is something that he bought for his business use. So in that case, he declares the price he paid in line 33, field 89 of the Umsatzsteuer-Voranmeldung, and at the same time, i.e. in that same Umsatzsteuer-Voranmeldung, deducts that 19% German VAT on that amount in line 57, field 61. So in the end, buying that item from a non-EU business will not have cost him any VAT.

 

**********************************************************************************************

 

For all these non-German situations, he actually has to mention his VAT ID in his invoices!

So he should have been already writing his German VAT ID on all these invoices to EU businesses and non-EU countries. 

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Oh, um, he does! :

Quote

 

So... now I have:

1. His business tax number

2. His Elster certificate

3. His VAT-ID number

 

(In his pile of papers that he didn't understand at all and I am just beginning to understand, thanks to you!)

 

So does this mean that whenever he buys something from an EU company for his business he doesn't need to pay VAT either?

 

And if he provided his VAT-ID he wouldn't have to pay this 19% Einfuhrumsatzsteuer on his shipments to Germany, either?

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In both cases, even though he doesn't charge German VAT on these sales, he still has to announce them in his Umsatzsteuer-Voranmeldung.
- sales to EU businesses: line 41, field 21 in the Umsatzsteuer-Voranmeldung
- sales to a non-EU country: line 42, field 45

 

So this is just so that the Finanzamt is aware of these transactions, right? Is it used to calculate his overall Umsatz and obligation to charge/pay Umsatz? It's not used in the calculation of the Umsatz that he owes to the Finanzamt that month, right?

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7 minutes ago, MLmunich said:

So does this mean that whenever he buys something from an EU company for his business he doesn't need to pay VAT either?


Yes.
Please reload this page and then read my previous answer, I have added something to make this clear.

 

7 minutes ago, MLmunich said:

And if he provided his VAT-ID he wouldn't have to pay this 19% Einfuhrumsatzsteuer on his shipments to Germany, either?

 

No, we haven't come this far yet.
He still has to pay it and then get it back through his Umsatzsteuer-Voranmeldung.

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Oh, and sorry, if we answered this in our lengthy correspondence somewhere, but can he subtract Umsatzsteuer paid to any EU business and not just German ones from his VAT announcements?

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33 minutes ago, MLmunich said:

So this is just so that the Finanzamt is aware of these transactions, right? It's not used in the calculation of the Umsatz that he owes to the Finanzamt that month, right?

Yes.

 

33 minutes ago, MLmunich said:

Is it used to calculate his overall Umsatz and obligation to charge/pay Umsatz?

 

Huh?

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7 minutes ago, MLmunich said:

Is it used to calculate his overall Umsatz and obligation to charge/pay Umsatz?

Huh?

 I mean, the reason why they would want to know these figures (Umsatz on sales to EU businesses, Umsatz on sales to a non-EU country) is because they can add these to his other Umsatz (Umsatz on sales to private customers) to calculate his total Umsatz. And they want to know his total Umsatz so they can see whether he is a Kleinunternehmer or earns enough to owe Umsatzsteuer (that rule that says you can't have earned more than 17500€ last year and 50000€ this year), right?

 

PS, do I understand this Kleinunternehmer rule correctly?

  • If someone earned 17,499€ or less in Umsatz last year and 17,499€ or less in Umsatz this year, then they don't have to charge or pay Umsatzsteuer last year, this year or the next year.
  • If someone earned 17,499€ or less in Umsatz last year and 17,500€-49,999€ in Umsatz this year, then they don't have to charge or pay Umsatzsteuer last year or this year, but do have to pay it the next year.
  • If someone earned 17,499€ or less in Umsatz last year and 50,000€ in Umsatz this year, then they don't have to charge or pay Umsatzsteuer last year, but they do have to pay it this year and next year.

 

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