Value added tax (annual return)
Source: BUS Rheinland-PfalzValue added tax (also called value added tax) is systematically part of the property and transaction taxes. However, its economic effect is a general excise duty which, in principle, is levied on all private and public consumption.
In principle, the entrepreneur is liable for VAT. According to the definition of the law, an entrepreneur is one who carries out a sustainable activity independently in order to generate income.
The following are subject to VAT:
- deliveries and other services,
- import (import VAT) and
- intra-Community acquisitions.
The basis of assessment is the remuneration that an entrepreneur receives for his services in Germany.
Instead of the standard rate of 19%, certain transactions may be subject to the application of the reduced rate of 7% or exemption from VAT.
In order to avoid tax cumulation, the trader is entitled to deduct from the tax he is liable for his transactions the amounts of turnover tax (input tax) which other traders have openly invoiced him for the taxable transactions carried out to him. Also deductible as input tax is the VAT on intra-Community acquisitions and the import turnover tax paid by the entrepreneur to the customs office when importing goods from non-EU countries.