• Sales Tax Law in Germany
  • June 10, 2013 | Author: Michael Rainer
  • Law Firm: GRP Rainer LLP - Stuttgart Office
  • Sales tax is a tax incurred when deliveries or other services are exchanged. For this reason, sales tax is incurred with respect to nearly every service and every product.

    GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Bremen, Dusseldorf, Essen, Frankfurt, Hamburg, Hanover, Munich, Nuremberg, Stuttgart and London www.grprainer.com/en conclude: Sales tax is a tax that is raised on nearly every service and every product in the corresponding state. Sales tax is rendered by businesses to the tax office, but is ultimately paid by those who, for instance, benefit from a service or purchase a product. Sales tax is thus an indirect tax with respect to which the person liable to pay tax and the person who is economically burdened are not identical.

    The basis for calculating sales tax is the consideration paid by the service recipient or purchaser minus the sales tax paid. Sales tax in Germany generally amounts to 19%, although partial relief is possible and then it amounts to only 7%. An exemption from sales tax is also possible under certain circumstances.

    A distinction must be made in the context of the tax assessment period for sales tax between nominal and actual taxation. With regard to sales tax, it is necessary as a matter of principle to provide a monthly or quarterly turnover tax advance return. In principle, sales tax arises with the passing of the interim return period in which the service or delivery was performed. Nominal taxation means that the accrual does not depend on whether the service or delivery has already been paid. Actual taxation, on the other hand, means that the sales tax need not be registered until it has actually been paid by the client. For this purpose, an application must be submitted to the tax office.

    Sales tax law is a complex matter and for a laymen often not to be overlooked. Businessmen subject to sales tax are faced with all kinds of obligations and certain deadlines must be observed. A lawyer active in the field of tax law can advise on all tax law issues, as well as provide representation where there are disputes with the financial authorities or before the finance courts.