Flat Rate for Input Tax in Annual Statement

Any and all business persons that add VAT to their invoice know that they can deduct the VAT billed to them by other businesses – the so-called ”input tax“. But what if your turnover was high and your investments were low? You can use a little-known flat rate – pursuant to §23 UStG i.c.w. §§69, 70 UStDV. However, this relief applies only for businesses required to keep tax records and not balance sheets. If your turnover was less than € 61,356 in the previous year, you are eligible.

A practical example: A journalist made € 60,000 plus € 9,600 turnover in 2006. He collected only € 2,000 on input tax. His VAT return would amount to a bill of € 7,600 (= € 9,600 VAT – € 2,000 input tax). If he takes advantage of the flat rate, he will be able to deduct 4.8% of his turnover or € 2,880 flat input tax. This will lead to a VAT payment of only € 6,720 instead of €7,600.

Below you will find the applicable flat for some common professions. If your trade is not listed, please consult your attorney or tax advisor.

 

I. Crafts

Bakeries:

5.4 % of turnover

Car repairs:

9.1 % of turnover

Printers:

6.4 % of turnover

Stone cutter:

8.4 % of turnover

Tailoring:

6.0 % of turnover

 

II. Retail

Animals and zoological demand

8.8% of turnover

Bicycles and mopeds:

12.2 % of turnover

Candy:

6.6 % of turnover

Clothing:

12.3 % of turnover

Drugstores:

10.9 % of turnover

Electrotechnical products, radio, TV, stereos

11.7 % of turnover

Flowers and plants:

5.7 % of turnover

Groceries:

8.3 % of turnover

Newspapers and magazines:

6.3 % of turnover

Shoes and shoe accessories:

11.8% of turnover

 

III. Trades

Hostels, hotels

6.7 % of turnover

Restaurants, bistros, bars, cafés

8.7 % of turnover

Transport of persons with cars

6.0 % of turnover

 

IV. Free Professions

Sculptors

7.0 % of turnover

Graphic artist

5.2 % of turnover

Painting artist

5.2 % of turnover

Freelancers for stage, film, radio,

 

TV and recording studios:

3.6 % of turnover

High school teachers:

2.9 % of turnover

Journalists:

4.8 % of turnover

Writers:

2.6 % of turnover

 

 

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