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

[MLmunich 51]

The net amounts on the EÜR include the cost of items bought for which no VAT was paid, right? So if he bought something from a Chinese seller or small business on eBay, for 8,99€ then that 8,99€ also is included in the net total right?

[PandaMunich 15,961]

Yes.

[MLmunich 51]

In Line 49 An das Finanzamt gezahlte und ggf. verrechnete Umsatzsteuer, I only put the amount he actually paid after submitting the VAT announcements, right? So if part of it he didn't pay until 2019, then I will put it in Line 49 on the 2019 return, right?

 

What does "und ggf. verrechnete Umsatzsteuer" mean?

 

Thank you.

[PandaMunich 15,961]

6 hours ago, MLmunich said:

In Line 49 An das Finanzamt gezahlte und ggf. verrechnete Umsatzsteuer, I only put the amount he actually paid after submitting the VAT announcements, right? So if part of it he didn't pay until 2019, then I will put it in Line 49 on the 2019 return, right?

 

Yes.

Yes.

 

6 hours ago, MLmunich said:

What does "und ggf. verrechnete Umsatzsteuer" mean?

 

"and maybe offset VAT".

Doesn't apply to you, that's when the Finanzamt internally shifts VAT dues and credits from one year/account to another.

[MLmunich 51]

I think I'm pretty much done. Thank you for your help. 

 

However, I'm exhausted, and he MUST get his own tax advisor for all future tax procedures, even though his profit lies at negative 12 thousand, which explains why he can't afford one... I really don't know what to do if he doesn't. I'm going to try to visit a separation and divorce advising office tomorrow because I'm concerned as someone told me today that all of his debts including unpaid rent become mine by default of our marriage.

 

And I'm a little concerned because I think I made some mistakes on his 2017 returns, therefore I'm probably bound to have also made some mistakes I'm unaware of on his 2018 taxes. I have no idea how to do proper accounting and go back and compare all of his paypal, bank statements and ebay statements and write all of these transactions down. I only know how to look at his list of ebay sales and add all those figures up. What are the consequences of making a mistake on the returns? For example, if I accidentally used brutto figures instead of netto last year or calculated a number incorrectly?

[MLmunich 51]

Oops, forgot the Umsatzsteuererklärung...

 

I'm confused what to do about Line 168 Vorauszahlungszoll 2018 (einschließlich Sondervorauszahlung)... I believe he/I only transferred part of the owed amount in 2018, but we/I transferred the remaining amount this year, 2019. So should I only put the amount that was transferred in 2018 and then it will show that we/he still owes, or should I put the amount transferred in 2018 plus the remaining late amount transferred in 2019? I assume the figure won't include all the verspätungs/säumniszuschläge, right? So I will need to call them to ask for sure what the figure was.

[PandaMunich 15,961]

5 hours ago, MLmunich said:

What are the consequences of making a mistake on the returns? For example, if I accidentally used brutto figures instead of netto last year or calculated a number incorrectly?

 

None for you, he's the Unternehmer, you're just the wife 

No, really, wives are left alone by the Finanzamt, they blame the Unternehmer.

 

4 hours ago, MLmunich said:

should I put the amount transferred in 2018 plus the remaining late amount transferred in 2019

 

That's it.

[MLmunich 51]

15 hours ago, PandaMunich said:

None for you, he's the Unternehmer, you're just the wife 

No, really, wives are left alone by the Finanzamt, they blame the Unternehmer.

Good to know, but in the event I didn't work up the courage to leave him yet, whatever happens to him ends up affecting me too, so what could happen? Would the Finanzamt simply ask to give the calculated difference (if there was one) or would there be fine and fees on top of that or even more serious?

 

Also, he is late on his current VAT payment and it's very bad, but I don't want to lend him money again. If his selbständig + employed income for 2018 totals to less than 14,000 than will he get the tax he paid for his fixed employment back at the end of the year? Because he is telling me that if I transfer the VAT money for him I can put my account as the receiving account for the returned lohnsteuer... But I want to be sure that the negative 12,000 in self-employed income will count against the income earned from Lohn and there will indeed be a return payment. Otherwise I just lose more money to him.

[MLmunich 51]

Just to double check, if the Umstatzsteuererklärung shows that his owed Umsatz was 3200€, and he made one VAT payment in 2018 of 1300€, one late 2018 VAT payment in 2019 of 2350€ and one late 2017 Umsatzsteuererklärung payment (geschätzt by them) of 150€, then I should write this total:

 

1300+2350+150 = 3700€ 

 

in  Line 168 Vorauszahlungszoll 2018 (einschließlich Sondervorauszahlung)

 

which results in the Finanzamt owing him 500€ back?

 

Or can the late estimated 2017 Umsatzsteuererklärung payment not be counted?

 

17 hours ago, PandaMunich said:

 

21 hours ago, MLmunich said:

should I put the amount transferred in 2018 plus the remaining late amount transferred in 2019

 

That's it.

But I understand from this, that at least 1200+2350= 3550€ can be written in this line.

 

And he also paid about 300€ in late fees for the late VAT payments, but I shouldn't include these here, right?

[PandaMunich 15,961]

12 hours ago, MLmunich said:

Good to know, but in the event I didn't work up the courage to leave him yet, whatever happens to him ends up affecting me too, so what could happen? Would the Finanzamt simply ask to give the calculated difference (if there was one) or would there be fine and fees on top of that or even more serious?

 

If this is his first offence, they would just ask for the extra tax that's due, plus 6% per year late interest.

 

12 hours ago, MLmunich said:

If his selbständig + employed income for 2018 totals to less than 14,000 than will he get the tax he paid for his fixed employment back at the end of the year?

 

He will only get all the Lohnsteuer back if you file jointly and if:

 

14,000€ (self-employed loss + employee income) in 2018

-  ...€ what both of you paid for health insurance in 2018

+ ...€ what you received in Elterngeld in 2018

______________________________________

= below 18,000€, since as a married couple the first 18,000€ (= 2 * Grundfreibetrag_2018 = 2 * 9,000€) are tax-free

 

However, you should know that if he is in the habit of generating losses with his self-employed activity, there is the risk that the Finanzamt will classify it as a non-viable activity (= Liebhaberei), and then they will no longer allow that loss to lower your other income.

But before that happens, the Finanzamt sends out a letter telling you to "start making a profit or they will classify the activity for the future as Liebhaberei", so this isn't something that happens retroactively.

 

8 hours ago, MLmunich said:

Or can the late estimated 2017 Umsatzsteuererklärung payment not be counted?

 

It cannot be counted in the VAT tax return, i.e. in the Umsatzsteuererklärung 2018, since it's not 2018 VAT.

 

However, it does enter the income tax return, since it is a business expense that is part of the amount that you claim for in Anlage EÜR line 49 "An das Finanzamt gezahlte und ggf. verrechnete Umsatzsteuer".

 

8 hours ago, MLmunich said:

But I understand from this, that at least 1200+2350= 3550€ can be written in this line.

 

Yes.

 

8 hours ago, MLmunich said:

And he also paid about 300€ in late fees for the late VAT payments, but I shouldn't include these here, right?

 

No, those 300€ are just a business expense in his Anlage EÜR line 51 "Übrige unbeschränkt abziehbare Betriebsausgaben", i.e. the increase his loss: https://www.steuertipps.de/selbststaendig-freiberufler/themen/sind-steuerliche-nebenleistungen-betriebsausgaben

[MLmunich 51]

11 hours ago, PandaMunich said:

If this is his first offence, they would just ask for the extra tax that's due, plus 6% per year late interest.

How does it get to the point of first offence? When will the Finanzamt ask for all of his papers and receipts and do all the calculations to check if there any errors?

 

11 hours ago, PandaMunich said:

It cannot be counted in the VAT tax return, i.e. in the Umsatzsteuererklärung 2018, since it's not 2018 VAT.

Ok, so I think I get the rule. Whatever was paid towards 2018 VAT can be counted against the VAT in the 2018 Umsatzsteuererklärung, no matter when that VAT was actually paid. Which means that if you pay your VAT really late, after you've already submitted the relevant Umsatzsteuererklärung, then the next year it can no longer be counted against VAT on the Umstazsteuererklärung, but rather a LIne 52 business expense. Right?

 

By the way, how do you know so much about this topic? Do you work for the Finanzamt or are you a Steuerberater or are you just really, really well-informed?

[PandaMunich 15,961]

3 hours ago, MLmunich said:

How does it get to the point of first offence?

 

If he had already had an audit (= Betriebsprüfung) a few years after that  Bescheid had been issued and they would have found discrepancies in that audit.

 

3 hours ago, MLmunich said:

When will the Finanzamt ask for all of his papers and receipts and do all the calculations to check if there any errors?

 

There are two possibilities:

• the Finanzamt either asks for them now, i.e. during the time they process the tax return, before they issue the Bescheid.
  In that case, any mistakes they find, they will correct, no harm done. So this is not an offence
• The Finanzamt decides to do an audit (= Betriebsprüfung) a few years later, in which case any grave mistakes they find will mean a first tax evasion offence. But they won't punish him for small mistakes made in good faith.

3 hours ago, MLmunich said:

Ok, so I think I get the rule. Whatever was paid towards 2018 VAT can be counted against the VAT in the 2018 Umsatzsteuererklärung, no matter when that VAT was actually paid. Which means that if you pay your VAT really late, after you've already submitted the relevant Umsatzsteuererklärung, then the next year it can no longer be counted against VAT on the Umstazsteuererklärung, but rather a LIne 52 business expense. Right?

 

VAT you took in (from your clients or as a VAT reimbursement from the Finanzamt) is always business income in Anlage EÜR in your income tax return, while VAT you paid (either for stuff/services you bought or what you forward every month to the Finanzamt) is always a business expense in Anlage EÜR in your income tax return.

 

In the most ideal of worlds, if you have kept everything up-to-date, you would have immediately forwarded the VAT you owe to the Finanzamt, so this VAT business income and the VAT business expense would cancel out, and VAT would have no effect at all on your profit/loss - you get it, you pass it on.

 

However, in your case, you paid part of the 2018 VAT very late, after 10. January 2019, so instead of being a business expense in 2018 where it would cancel out this same VAT you took in from your clients in 2018, you can only claim it as a business expense in 2019.

 

Example:

 

You sold products worth 11,900€ (= 10,000€ + 1,900€ VAT) in 2018.

 

Case 1: you forwarded the VAT on time to the Finanzamt, by 10. January 2019:

 

Income tax return 2018:

The simple profit calculation performed in Anlage EÜR (if we neglect business expenses) would be:

 

10,000     line 14 "Umsatzsteuerpflichtige Betriebseinnahmen" in Anlage EÜR

 1,900      line 16 "Vereinnahmte Umsatzsteuer"

-1,900      line 49 "An das Finanzamt gezahlte und ggf. verrechnete Umsatzsteuer"

_____________________________________________________________________

10,000     profit for 2018

 

 

VAT return = Umsatzsteuererklärung 2018:

 

1,900      "Steuer" column in line 38 "Lieferungen und sonstige Leistungen ... zu 19 %"

1,900       Vorauszahlungssoll 2018, since you had already forwarded those 1,900€ in VAT

_____________________________________________________________________

0              VAT still due, in line 169 "Noch an die Finanzkasse zu entrichten"

 

 

 

Case 2: you forwarded the 2018 VAT too late to the Finanzamt, after 10. January 2019:

 

Income tax return 2018:

The simple profit calculation performed in Anlage EÜR (if we neglect business expenses) would be:

 

10,000     line 14 "Umsatzsteuerpflichtige Betriebseinnahmen" in Anlage EÜR

 1,900      line 16 "Vereinnahmte Umsatzsteuer"

_____________________________________________________________________

11,900     profit for 2018

 

 

VAT return = Umsatzsteuererklärung 2018:

 

1,900      "Steuer" column in line 38 "Lieferungen und sonstige Leistungen ... zu 19 %"

1,900       Vorauszahlungssoll 2018, since you had already forwarded those 1,900€ in VAT, even though only in 2019

_____________________________________________________________________

0              VAT still due, in line 169 "Noch an die Finanzkasse zu entrichten"

 

 

 

Case 3: you didn't forward the 2018 VAT at all to the Finanzamt:

 

Income tax return 2018:

The simple profit calculation performed in Anlage EÜR (if we neglect business expenses) would be:

 

10,000     line 14 "Umsatzsteuerpflichtige Betriebseinnahmen" in Anlage EÜR

 1,900      line 16 "Vereinnahmte Umsatzsteuer"

_____________________________________________________________________

11,900     profit for 2018

 

 

VAT return = Umsatzsteuererklärung 2018:

 

1,900      "Steuer" column in line 38 "Lieferungen und sonstige Leistungen ... zu 19 %"

0             Vorauszahlungssoll 2018, since you hadn't forwarded any VAT at all

_____________________________________________________________________

1,900      VAT still due, in line 169 "Noch an die Finanzkasse zu entrichten"

 

 

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

 

Umsatzsteuererklärung = VAT return

Let's translate the word "Vorauszahlungssoll 2018" from line 168 of the Umsatzsteuererklärung 2018, it's "Prepayment should", i.e. the pre-payements he should have made.

So as long as he really did the payment before submitting this Umsatzsteuererklärung 2018, no matter whether in 2018 or 2019, it's part of line 168.

 

Of course, if he hadn't made the payment at all but had just announced it in his UStVA (= VAT announcement), you're not allowed to include it in line 168, and this will of course mean a higher VAT debt result in line 169, since you still owe that money.

 

Einkommensteuererklärung = income tax return

If you're is a Gewerbetreibender whose profit is below 60,000€ a year (and your turnover is under 600,000€), this means that you are not obliged to do double-entry bookkeeping, see §141 AO. 

 

You only report income when it enters your bank account, and only report expenses in the moment you actually paid them, this is called Einnahmen-Überschuss-Rechnung (EÜR), which translated means "revenue-surplus-calculation", i.e. the "surplus of what you took in, over what you spent", which is why you use the tax form Anlage EÜR. 

The result of this EÜR is your taxable profit (or loss) that year. 

 

This simple way of doing things means that you are NOT allowed to shift things through accruals and deferrals.   

So income and expenditure are not perfectly aligned to each other, they simply fall as they may, this is what the Zufluss/Abfluss-Prinzip (= inflow/outflow principle) of §11 EStG dictates. 

If a client pays an invoice for product you delivered in December 2018, only in January 2019, well, that's tough luck, you have to deduct the expenses you incurred to make that product when you actually paid them in 2018, but the money the client paid will raise your 2019 profit.

Very strict, but simple.

 

There are only a few exceptions to this strict "deduct when paid"/"add when received"-rule:

• if a recurring payment/income, e.g. rent or payments resulting from your UStVA (= VAT announcement) happens within 10 days of the New Year, it is shifted to the year it really belongs to. 
  
  This exception is set down in  §11 (1) sentence 2 EStG for money you get within that 31.12 ± 10 day window, and in  §11 (2) sentence 2 EStG for money you pay within that 31.12 ± 10 day window.
  So, if for example, you would pay your office rent for January 2019 already on 21. December 2018, you claim it as a business expense in your 2019 EÜR. 
  If you already paid the rent on 20. December 2018, then tough luck, it's an expense in your 2018 EÜR.
  
  If the Finanzamt debits the VAT you calculated in your UStVA, as long as you submitted the "December 2018 UStVA" by 10. January 2019, no matter how late the Finanzamt takes the money out of your bank account, that expenditure still belongs to December 2018. So you're not punished for the fact that you set up a direct debit instead of actively transferring the due VAT into the Finanzamt's bank account every month before the 10th. 
  That expenditure also belongs to December 2018 in the case that you hadn't set up a debit, but had submitted the UStVA on time by 10. January 2019 and had also transferred them their VAT by 10. January 2019.
  
  If, on the other hand, it was your fault that they got that VAT too late, e.g. if you submitted your UStVA too late, say on 11. January 2019, or if you hadn't set up a debit at all but transferred the money too late into the Finanzamt's bank account, then that VAT for December 2018 is a business expense in 2019.
   
• all items that cost more than 800€ (since 2018, before the limit was 410€) excluding VAT have to be depreciated over their lifetime. 
  This depreciation is called AfA = Absetzung für Abnutzung = "depreciation for wear and tear" and is claimed in line 30 of  Anlage EÜR. 
  The lifetime for different articles is set down in the AfA-tables.
  So this is an exception to the outflow principle. You paid, for example, 3,600€ net for a PC in December 2018, and a PC has a lifetime according to the AfA-table of 36 months, but you only get to "use" as a 2018 business expense 200€ of that 3,600€ expenditure.  
  
  Items that cost over 150€ net and up to 800€ net are called GWG = Geringwertige Güter = "low-cost items", and are depreciated 100% in the year they were bought, so no exception to the outflow principle here. You claim for it in the year you paid for it.
  A copier that cost up to 800€ net (= without VAT), even though it is office equipment, would not be claimed for under the category "office equipment" (if there were a category like that in the EÜR, there isn't, it just has a big "miscellaneous"-category called "Übrige unbeschränkt abziehbare Betriebsausgaben" line 51), but in the category "GWG" which is line 33 in Anlage EÜR. 
  If you bought a bicycle to get around to your business meetings for 952€ (= 800€ net), it would also be in the category "GWG", and not in the category "vehicles" (which again, does not exist in the EÜR, but I am trying to use category names that make sense).
  
  Items that cost below 150€ net are also depreciated 100% in the year they were bought (so again, no exception to the outflow principle), but they are not GWG, but are simply declared in the category they belong to, e.g. an office lamp for 119€ (= 100€ net) would be, since the Anlage EÜR is so simple that it doesn't even have a category "office equipment", be put into the  "miscellaneous" category = "Übrige unbeschränkt abziehbare Betriebsausgaben" in line 51 of  Anlage EÜR.

 

 

 

 

[MLmunich 51]

AWESOME EXPLANATIONS!!! THANK YOU!!!

 

And I have good news, I think I finally found him a tax advisor!!! We are going for a meeting on Friday!!!

[MLmunich 51]

My husband couldn't afford his Steuerberater (620€ for a quarterly VAT statement), so I'm about to do his late 3rd quarter VAT for 2019. :-(

 

I'm wondering... If a customer bought an expensive machine for which my husband had to forward VAT in the 2nd quarter, but then returned the machine in the 3rd quarter, do I need to do:

 

1. Berichtigte Anmeldung for 2nd quarter

2. Minus the VAT from the 3rd quarter (but this might end up in a negative number)

3. correct it at the end of the year

 

I would prefer if it's an option to do 1 or 2 because he needs to get this money back as he owes many huge sums of money right now.

 

Thank you.

[AlexTr 19,440]

@PandaMunich will know better, but I believe you issue the credit note for the refund to the returning customer and then you input the VAT as a negative number in the system, indicating the return of the VAT.

[MLmunich 51]

My second question is, any idea what software I should use to do all of this bookkeeping versus Excel? What do most Steuerberater use?

[PandaMunich 15,961]

11 hours ago, AlexTr said:

I believe you issue the credit note for the refund to the returning customer and then you input the VAT as a negative number in the system, indicating the return of the VAT.

 

Correct.

That net returns amount will lower your base amount in line 26, field 81 in the VAT announcement for the 3rd quarter, so the Elster system will calculate a lower VAT.

[PandaMunich 15,961]

10 hours ago, MLmunich said:

My second question is, any idea what software I should use to do all of this bookkeeping versus Excel? What do most Steuerberater use?

 

As long as his yearly profit is up to 60,000€, he's allowed to use Excel to do his bookkeeping.

 

Believe me, you do not want to use specialised software since that's for double-entry accounting and in German.

However, if you insist, you can do a 30 day test of the Lexware buchhaltung software, which has an export function to DATEV, i.e. you can export data and give them to a Steuerberater: https://shop.lexware.de/buchhaltungssoftware

 

Steuerberater mostly use DATEV, which is only sold to Steuerberater.

[AlexTr 19,440]

26 minutes ago, PandaMunich said:

 

Correct.

That net returns amount will lower your base amount in line 26, field 81 in the VAT announcement for the 3rd quarter, so the Elster system will calculate a lower VAT.

 

Neat! What do I win? Oh, yeah, no fines and penalties.

[MLmunich 51]

14 hours ago, PandaMunich said:

 

Correct.

That net returns amount will lower your base amount in line 26, field 81 in the VAT announcement for the 3rd quarter, so the Elster system will calculate a lower VAT.

And it's ok to have a negative number here? And it will be refunded shortly or at the end of the year?